Crown Laboratories, Inc., a global skincare company, and Revance Therapeutics, Inc. (NASDAQ: NASDAQ:RVNC), a biotechnology firm, have announced a definitive merger agreement.
Crown will initiate a tender offer to purchase all outstanding shares of Revance for $6.66 per share in cash, which amounts to a total enterprise value of approximately $924 million.
The acquisition price represents a significant premium over Revance's recent stock valuations, with an 89% increase over the closing price on August 9, 2024, and a 111% premium over the 60-day volume-weighted average price. The merger, which has received unanimous approval from Revance's Board of Directors, is anticipated to finalize by the end of the year.
Jeff Bedard, CEO of Crown, expressed that the merger aligns with Crown's vision to become a fully integrated global aesthetics and skincare company. He highlighted the synergy of Revance's innovative aesthetic products with Crown's skincare line, aiming to create a comprehensive portfolio for various life stages.
Mark J. Foley, President and CEO of Revance, also conveyed his enthusiasm for the merger, noting the opportunity for expanded product offerings and the potential for accelerated growth.
The transaction is contingent upon a majority of Revance's shares being validly tendered, along with the necessary regulatory approvals and standard closing conditions. Revance will no longer be publicly traded on Nasdaq following the merger's completion.
The merger is positioned to form one of the leading global aesthetics and skincare companies, with an extensive distribution network spanning medical, retail, and e-commerce channels. The combined entity is expected to leverage a portfolio of over 10 innovative skin health and aesthetic brands, including DAXXIFY®, the RHA® Collection, SkinPen®, PanOxyl®, Blue Lizard®, and StriVectin®.
Revance Therapeutics reported a 20% year-over-year increase in its total net revenue, reaching $65.4 million in the second quarter of 2024. This growth was largely driven by a 65% increase in units sold and a 27% rise in net product revenue in its aesthetics division. The company also launched DAXXIFY, a new product for cervical dystonia, and expects to generate modest revenue from it in 2024.
Revance Therapeutics is on track to meet its revenue guidance of $280 million for the year, having achieved approximately 40% of this target by the end of the second quarter. The company is also projecting positive adjusted EBITDA by 2025. Despite observing some softness in the aesthetics market, the firm anticipates consistent growth for the RHA product line and sequential growth for DAXXIFY.
InvestingPro Insights
The definitive merger agreement between Crown Laboratories and Revance Therapeutics (NASDAQ: RVNC) has stirred significant interest in the market, especially considering the proposed acquisition price of $6.66 per share in cash. This offer is notably generous given Revance's recent market performance, with an 89% increase over the closing price on August 9, 2024. InvestingPro data shows a Market Cap of $370.03 million for Revance, which, when coupled with a recent significant return of 15.36% over the last week, may reflect investor optimism regarding the deal.
Despite enthusiasm surrounding the merger, two key InvestingPro Tips suggest caution for investors: Revance has been quickly burning through cash and analysts do not anticipate the company will be profitable this year. This aligns with the reported negative P/E Ratio (Adjusted) of -1.71 for the last twelve months as of Q2 2024, indicating that the company is not currently generating profits. Moreover, the significant price fall of 81.33% over the last year raises questions about the company's valuation despite the merger news.
However, it's not all challenging news for Revance. The company's liquid assets exceed its short-term obligations, which may provide some financial stability in the short term. For investors seeking deeper insights, InvestingPro offers additional tips on Revance, available at https://www.investing.com/pro/RVNC, which could further inform investment decisions post-merger announcement.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.