SCOTTSDALE, Ariz. and HAYWARD, Calif., Sept. 13, 2011 — Medicis Pharmaceutical Corporation (Medicis) (NYSE:MRX) and Solta Medical, Inc. (Solta; Solta Medical) (Nasdaq:SLTM) today announced that the two companies have entered into a Stock Purchase Agreement for Solta to acquire all of the outstanding shares of Medicis Technologies Corporation (formerly LipoSonix, Inc.), a subsidiary of Medicis.
Under the terms of the agreement, Solta will pay to Medicis $15 million upon closing, up to $20 million upon the achievement of a near-term U.S. Food and Drug Administration (FDA) regulatory milestone and certain additional future contingent payments based upon, among other things, the achievement of specified year-to-year increases in the worldwide commercial performance of the LIPOSONIX technologies. Solta’s obligation to make these additional future contingent payments expires after approximately 7 years. Additionally, Solta will be responsible upon closing for the Bothell, Washington, facility, and has expressed the intent to maintain the Bothell facility and integrate it into its existing worldwide operations. Solta will also assume upon closing Medicis’ obligations to make future contingent payments under the acquisition agreement between Medicis and the former shareholders of LipoSonix, Inc. The transaction is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act.
“We are pleased to announce this transaction with Solta,” said Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. “We believe Solta, with its specialization in capital equipment among other things, is well-suited to commercialize the novel LIPOSONIX technologies worldwide. Medicis continues to believe the worldwide market for fat ablation is attractive and lucrative. We look forward to Solta’s commercial success, as we remain focused on our core heritage of medical dermatology and facial aesthetics. We thank our employees who have worked so diligently on the LIPOSONIX technologies. Their tremendous contributions have made possible our progress in the rapidly growing worldwide body contouring market.”
“The addition of LIPOSONIX to the Solta Medical family illustrates our strategy to broaden our portfolio of superior aesthetics solutions. As the current industry leader in skin resurfacing and tightening, Solta will expand into the large and growing market for the non-invasive destruction of fat,” said Stephen J. Fanning, Chairman of the Board, President and Chief Executive Officer of Solta. “The transaction fits extremely well with our existing product offerings as well as with our business model, given the LIPOSONIX system includes a disposable component that will complement Solta’s recurring revenue profile. With a focus on high-end dermatologists and plastic surgeons, the LIPOSONIX product line is a natural extension of the premier solutions our global sales force is currently selling. Our goal is to extend the cross-selling success that we have enjoyed with the Thermage® and Fraxel® brands to the second generation LIPOSONIX brand. Finally, we anticipate that the transaction will be accretive within 12 months of its completion.”
The transaction is expected to close during the fourth quarter of 2011. Solta expects to fund the acquisition through existing cash balances and credit facilities.
The LIPOSONIX system is currently marketed in Canada, the European Union and Japan, and was recently cleared by the FDA for non-invasive waist circumference reduction. Medicis announced plans in February to explore strategic alternatives for the LIPOSONIX business, including, but not limited to, the sale of the stand-alone business, as Medicis focused on its core heritage of medical dermatology and facial aesthetics. The LIPOSONIX business was classified as a discontinued operation for financial statement reporting purposes beginning in the first quarter of 2011. Medicis will continue supporting existing LIPOSONIX customers worldwide until Solta assumes this responsibility after closing. Deutsche Bank Securities Inc. acted as financial advisor to Medicis on the transaction.
