Botox-maker Allergan is filling out its medical aesthetics portfolio with a $2.4 billion agreement to acquire Zeltiq Aesthetics, a company that has commercialized a medical device that gets rid of unwanted fat.
Under the cash deal, Dublin, Ireland-based Allergan (NYSE: AGN) will pay $56.50 per share to buy Zeltiq (NASDAQ: ZLTQ), which is based in Pleasanton, CA. The centerpiece of the acquisition is CoolSculpting, a Zeltiq medical device that uses cold temperatures to eliminate fat cells. The CoolSculpting procedure employs an applicator that selectively targets and cools the cells. Zeltiq says that this controlled cooling causes fat cells to break down without scarring or damaging skin, nerves, or surrounding tissue.
The FDA cleared CoolSculpting in 2010 for eliminating so-called love handles. In subsequent years, Zeltiq was able to expand use of its device by securing FDA clearance for CoolSculpting’s use on the abdomen, thighs, and chin. Zeltiq says that more than 5,700 of its CoolSculpting systems are in use in more than 80 countries worldwide. The company reported $255.4 million in 2015 revenue from CoolSculpting sales and procedures.
Allergan, which has U.S. headquarters in Parsippany, NJ, has been an active acquirer in recent months. In December, the company paid $2.9 billion for the regenerative medicine unit of San Antonio-based Acelity. Allergan plans to place CoolSculpting into its medical aesthetics lineup, which is led its top-selling product, botulinum toxin (Botox). The medical treatment for reducing skin wrinkles accounted for more than $1.9 billion of Allergan’s $15 billion revenue in 2015. CoolSculpting brings to Allergan a commercialized product in the field of body contouring, a market that the company projects to represent a $4 billion global opportunity.
The acquisition is still subject to approval by Zeltiq shareholders. The companies expect to close the deal in the second half of 2017.