SANTA BARBARA, Calif. - An Arizona company known for its antiwrinkle products is buying Goleta-based Inamed Corp., a leading maker of breast implants, in a cash and stock deal worth $2.8 billion -possibly the biggest in local history.
Medicis Pharmaceutical's purchase of Inamed, announced Monday, will form what Medicis Chairman and Chief Executive Officer Jonah Shacknai called an "aesthetics powerhouse."
The deal, expected to be completed by the end of the year, was touted as coming at a time of growing demand by aging baby boomers who are looking for ways to preserve a youthful appearance.
Nick Teti, Inamed's chairman, president and chief executive officer, views the union of a dermatology company and one specializing in the field of cosmetic devices as a match made in heaven.
"I see this as about as complementary a deal as you can get when putting two companies together to create a growth transaction rather than a cost (saving) transaction," he said.
This complementary aspect of the merger leads Inamed to believe there will be little impact on the Santa Barbara area operations or the staff, estimated earlier this year at around 425.
Inamed's research and development, information technology, regulatory and distribution functions, quality control, marketing and customer service are all unique, though there could be some modest overlap in administration that may affect some local jobs.
In its 25-year history, Inamed's success has been founded on its role as one of the nation's two main breast implant makers, a sometimes controversial field mired in claims that the use of silicone gel-filled implants may have triggered a variety of illnesses and health-related problems.
More recently, though, the company has become a significant player in the growing market for facial aesthetics and has developed a profitable surgical device, the Lap-Band, to counter morbid obesity.
In a conference call early Monday morning, Mr. Teti described the merger as a "powerful strategic combination" and said the alignment with Medicis represents "potentially tremendous value for shareholders."
The deal, which is still subject to shareholder and regulatory approval, values each Inamed share at $75.
Monday's news added $1.97 to Inamed shares, which closed up almost 3 percent at $68.21 after 14 times the average trading volume. Medicis finished off $2.57 (8 percent) at $29.11.
Susan Stewart, president of Charter Financial Group, a registered investment advisory group based in Washington, D. C., described the merger as a surprise but also as a "great deal for both companies."
Ms. Stewart, whose firm owns a large share of Inamed stock in an asset portfolio worth more than $150 million, said the deal is about two companies in "explosive growth stages" both targeting the baby boomer demographic.
Despite the size of the new combined venture, Ms. Stewart said there was every chance that it might next attract the attention of a much bigger fish in the health-care products pool, such as Johnson & Johnson.
The new company, with annual revenue expected to top $900 million in 2006, will have operations based in more than a dozen countries -including manufacturing facilities in Ireland and Costa Rica -customers in more than 60 countries and a global staff of around 1,500.
Both companies sought to portray the purchase as more a merger of equals and stressed the complementary nature of their products which are mostly aimed at consumers who want to look and feel better.
Medicis, established in 1988, is a specialty pharmaceutical company focusing primarily on the manufacture of prescription medications for dermatological and podiatric conditions and aesthetics medicine. Among its better known products is Restylane, an injectable dermal filler used to correct facial wrinkles.
- Gazette news services
Copyright © 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.