Botox maker Allergan Plc. has agreed on Monday to acquire biopharmaceutical company Zeltic Aesthetics Inc. for $2.48 billion in an effort to strengthen its beauty and aesthetic product lineups. Zeltic is known for its cryolipolysis fat reduction system .
According to Reuters, Allergan Plc. has agreed to pay $56.50 per share or a premium of 14.4 percent on the Friday’s closing price. Following the agreement, on Monday trading, Zeltiq’s share jumped 12.8 percent in the midday trading to reach $55.72.
Allergan stated that the company will benefit to acquire Zeltiq that famous for its CoolSculpting System to kill fat cells. The Zeltic product will strengthen the Allegan anti aging system Botox in the beauty and aesthetic market. The company’s Chief Commercial Officer Bill Meury said on the investors call, "Demand for both procedures is high and this is similar to pouring more gas on the fire."
In the acquisition deal, the two companies were advised by their own investment banks. Moelis & Company is the adviser for Allergan and Zeltiq was advised by Guggenheim as reported by Business Insider.
Zeltiq Aesthetics Inc. was founded in 2005 by Mitch Levinson to house the invention from two scientists from the Harvard Medical Schools, Rox Anderson and Dieter Manstein. Anderson and Manstein invented a method to destroy fat cells by freezing the cells to the 39° Fahrenheit (4° Celcius).
The method is called cryolipolysis, a portmanteau of “cryogenic" and "lipolysis” that is dubbed as “fat freezing.” Both Anderson and Manstein were interested to study the freezing effect to fat cells when they notice the children who ate popsicles got dimples in their cheeks. Further studies reveal the ice was able to eliminate the fat cells in a method that is noted to be more effective than liposuction.
While Allergan is known for its anti aging product Botox made from the botulinum toxin that works by paralyzing the muscle to prevent the contraction. Watch the commercial of the Botox as the anti wrinkle procedure below:
