Tuesday, November 20, 2012

Allergan acquires SkinMedica for $350m - Transaction Valuation and Acquisition Rationale

The dermatology space is witnessing significant interest as far as M&A is concerned. This is the fourth transaction in the recent past. The others include Valeant acquiring Medicis Sandoz acquiring Fougera.and Sun Acquiring DUSA 

Allergan acquiring SkinMedica - Transaction Valuation

Allergan will pay SkinMedica shareholders $350M in upfront and an additional $25M contingent upon the acquired products achieving a pre-specified sales level.  SkinMedica was expected to generate $70M in 2012. On 2012 revenues, the deal is valued at 5x revenue if we exclude the $25M contingent payment). The transaction appears to be in-line with sales multiples paid for aesthetics/dermatology assets in recent years, although clearly toward the higher end of the range (3.0-5.2x).  Allergan expects the SkinMedica transaction to be EPS neutral in 2013 but in-line with the company’s mid-teens growth aspirations longer term

About SkinMedica

SkinMedica markets prescription and non-prescription skin care products direct to physicians – including Vaniqa the only FDA approved Rx treatment for the reduction of unwanted facial hair in women. SkinMedica’s business is expected to reach profitability next year.

Allergan acquiring SkinMedica - Acquisition Rationale

Allergan’s has a global reach, while SkinMedica is a predominantly US focused. Thus Allergan can  leverage its existing relationship with physicians globally in aesthetic medicine by virtue of its product Botox Cosmetic to grow Skin Medica existing business.

No comments:

Post a Comment