Valeant Pharmaceuticals (NYSE:VRX, TSE:VRX) said it agreed to pay $2.92 per share for Solta Medical (NSDQ:SLTM) in a cash deal worth roughly $250 million.
The per-share price is a 40% premium over SLTM’s closing price Dec. 13. News of the pending deal, expected to close during the 1st quarter next year, sent Solta’s shares up 39.2% to $2.91 apiece as of about 10:30 a.m. today.
It’s good news for Solta, which had fallen on hard times. Last month the Hayward, Calif.-based medical aesthetics company said it would lay off 40 workers, or about 9% of its employee base, and shutter a plant in Louisville, Colo., it picked up in the $31 million acquisition of Sound Surgical in January.
"The acquisition of Solta will bring tremendous value to Valeant’s current aesthetic portfolio and together with our previous acquisitions, will create the broadest aesthetic portfolio in the industry," Valeant chairman & CEO J. Michael Pearson said in prepared remarks. "Solta’s leading aesthetic devices are a natural fit with Valeant’s facial injectables, professional skin care products and physician dispensed products and will establish Valeant in a strong leadership position as we continue to build our presence in the aesthetic market. Moreover, this transaction will further enhance our ability to offer dermatologists and plastic surgeons the most comprehensive aesthetic product offering."
"Our board of directors has determined that this all-cash offer is in the best interest of our stockholders. We further believe the acquisition by Valeant provides the best opportunity for Solta Medical brands and our employees to achieve their full potential while generating a significant, near term return for our stockholders," added Solta chairman & interim CEO Mark Sieczkarek. "Valeant has a proven track record of successfully integrating a number of major acquisitions into their portfolio and has established a significant presence in the aesthetics market. The addition of Solta’s industry leading brands and global sales organization creates a very compelling platform for future growth in the medical aesthetic segment. Our entire team looks forward to executing a smooth transition of our operations into the Valeant organization."
Leerink Swann analyst Richard Newitter said the deal is likely Solta’s best bet, given its straitened circumstances.
"We view the sale as SLTM’s best option given the company’s weak cash position and that a turnaround as a stand-alone – even under new leadership – had increasingly looked challenging to us," Newitter wrote this morning in a note to investors. "We’re inclined to view the announcement as a positive for the aesthetics devices space in general, as it points to continued interest (from larger healthcare organizations, or ‘outside-in’) for assets within a growth market with limited reimbursement risk, private pay exposure, and room for considerable cost structure leverage."
The Solta acquisition is not Valeant’s 1st move in the medtech market. Early this year the Laval, Quebec based pharma player shelled out a whopping $8.7 billion to Warburg Pincus for Bausch & Lomb.
