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AbbVie Unit To Acquire Soliton For $550M To Boost Aesthetics Unit

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AbbVie’s (ABBV) Allergan Aesthetics is to acquire Soliton (SOLY) plus its Rapid Acoustic Pulse device, which was recently approved by the U.S. Food and Drug Administration (FDA). The acquisition will expand the company’s body contouring treatment portfolio.

The acquisition is built around Resonic, the Rapid Acoustic Pulse device that uses rapid pulses of acoustic shockwaves to help fade unwanted tattoo ink. It also helps in disintegrating fat deposits for short-term improvement in cellulite appearance. The technology is poised to address a massive unmet need in modifying the appearance of cellulite.

“The addition of this technology complements Allergan Aesthetics' portfolio of body contouring treatments. Health care providers will now have another option to address consumers' aesthetic concerns”, said AbbVie Senior Vice President Carrie Strom.

Under the terms of the deal, the AbbVie unit is to pay $22.60 per share for each Soliton’s outstanding shares, valuing the deal at about $550 million. The two companies’ boards of directors have already approved the transaction. The deal should be sealed upon fulfillment of customary closing conditions.

The acquisition of Soliton comes on the heels of AbbVie's report of impressive Q1 2021 results, with sales and earnings coming in above estimates. Mizuho Securities analyst Vamil Divan has since reiterated a Buy rating on the stock, citing results that beat expectations. (See AbbVie stock analysis on TipRanks).

“With a diversified new product story, robust near-term growth and good visibility into its longer-term growth prospects, we continue to see AbbVie as an especially compelling investment opportunity, especially when one considers the discount it trades at and its robust dividend,” Divan wrote.

Divan has a $128 price target on the stock implying 10.14% upside potential to current levels.

Consensus among analysts on Wall Street is a Strong Buy based on 10 Buys and 2 Holds. The average analyst price target of $126 implies 8.42% upside potential to current levels.

ABBV scores an 8 out of 10 on the TipRanks’ Smart Score rating system, implying it is well-positioned to outperform the overall market.

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