BioForm Gets a Healthy Buyout from Merz Pharma

Posted Jan 4th 2010 5:30PM by Tom Taulli
Filed under: Deals

In the health care industry, one of the hot growth sectors is cosmetics. Let's face it, the world's populations are getting older -- especially in the US.

So this week, Merz Pharma Group, a major company in Germany, agreed to pay $253 million for BioForm Medical (BFRM). In fact, the premium came to 60% or $5.45. Keep in mind that the stock price was as low as $0.76 during the past year.

BioForm calls itself a "medical aesthetics company." Its flagship product, Radiesse, is a dermal filler and has sold over one million syringes worldwide.

Yet, the company remains fairly small. Over the past year, revenues came to $66.5 million, down 1.4% from the year before. There was also a net loss of $21.1 million.

So to boost growth, BioForm needs to expand its portfolio. While the company has various products under development, the distribution is likely to be expensive. Besides, there is a need to get federal approval.

But, with the buyout from Merz, there is opportunity to ramp things up. Consider that according to a report from the American Society for Aesthetic Plastic Surgery, the market for non-surgical and surgical procedures to enhance a patience's appearance is $11.8 billion worldwide. Also, the growth of non-invasive and minimally-invasive aesthetic procedures has gone from 4.3 million in 2000 to 8.5 million in 2008.

Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including the including The Complete M&A Handbook. His website is at Taulli.com.

Tags: bfrm, BioForm, inthenews, MerzPharma