Collagen Corp. Announces Non-Recurring Charge for Acquired Research and Development

Strategic Insights -

Collagen Corp. has made a significant announcement in its effort to expand its marketing franchise in cosmetic medicine. The company has acquired LipoMatrix Inc., the developer and manufacturer of the Trilucent breast implant, and will be taking a non-recurring charge for in-process research and development. This charge, valued at approximately $14.8 million, will be taken in the fiscal 1996 first quarter. The acquisition is a strategic move to broaden Collagen's presence in the cosmetic medicine market.

Key Takeaways:

  • Collagen Corp. has acquired LipoMatrix Inc. for approximately $23 million, with $18 million paid in cash and the remaining $5 million to be paid over a few years.
  • The acquisition includes the Trilucent breast implant, the first commercially available triglyceride-filled mammary implant in the world.
  • The non-recurring charge for in-process research and development is valued at approximately $14.8 million, or $1.50 per share after tax.
  • The charge will be taken in the fiscal 1996 first quarter, ending September 30, 1995.
  • The acquisition is expected to impact Collagen's fiscal quarter earnings results, with the company planning to report its quarterly earnings on October 19.
  • The company's ownership interest in LipoMatrix was approximately 40% on a fully diluted basis prior to the transaction.

Statistics:

  • The total acquisition price for LipoMatrix is approximately $23 million.
  • The non-recurring charge for in-process research and development is valued at approximately $14.8 million.
  • The charge is equivalent to $1.50 per share after tax.
  • The fiscal 1996 first quarter ended on September 30, 1995.
  • The acquisition is expected to impact Collagen's quarterly earnings results, with more details to be reported on October 19.

Sources:

  • "Collagen Corp. Announces Non-Recurring Charge for Purchased In-Process Research and Development," Business Wire, October 11, 1995.
  • "Collagen to Acquire Remaining Stake in LipoMatrix," Business Wire, August 22, 1995.