Two Deals Worth $125.3 Million Shake Up Science Industry
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Over the past few days, the Philadelphia region saw two large deals in the science industry — with $125.3 million changing hands.
Philadelphia has been a hotbed of M&A activity following a national trend led by the health care industry’s consolidation in response to health care reform. In fact more than half of all CEOs nationwide said they they plan on completing an acquisition this year, according to a recent PricewaterhouseCoopers study.
Let’s have a look at the two Philly-area deals:
42.5 Million: Maker of no!no! Hair Removal System Climbs Out of Debt
PhotoMedex of Horsham, Pa. is set to climb out of debt with the $42.5 million sale of two skin care units. It sold its XTRAC and VTRAC treatments for psoriasis and vitiligo to Mela Sciences.
Perhaps the most well-known PhotoMedex product is the no!no! hair removal system. With the debt paid off, the company will be in a strong position to focus on brands like no!no!, Kyrobak and Neova “without the burden of debt payments and the restrictions of forbearance agreements,” said CEO Dolev Rafaeli. Still, it gives up two lines of business (XTRAC and VTRAC) that generated $30.6 million in revenues in 2014.
Shares of Photomedex have been on a serious roller coaster since news of the deal broke. After opening at $1.75 on Monday, it rose 27 percent by Tuesday morning, but has since fallen to $1.66.
82.8 Million: Diplomat Pharmacy Acquiring Burmans Specialty Pharmacy
Diplomat Pharmacy has agreed to acquire Burmans Specialty Pharmacy for $82.8 million. Burmans is based in Brookhaven, Pa. and is part of a larger company with a three separate businesses. Diplomat is a public company based in Flint, Mich.
The Philadelphia Business Journal has more on Burmans’ motivation to sell:
Katie Battista, director of patient safety and program evaluation at Media, Pa.-based Burmans Pharmacy, said the company decided to sell its specialty pharmacy arm now because the business was growing beyond the 90-employee company’s capacity to properly operate it.
“We wanted to be able to grow, but we couldn’t keep up with the pace,” Battista said. “Drugs for hepatitis C are coming out so quickly, and the demand is unwieldy.”
