Faced with slumping sales, Solta Medical (Hayward, CA) may be looking for a suitor. The aesthetic medical device manufacturer may cut jobs or put itself up for sale in an effort to improve its finances. Solta focuses on devices for skin resurfacing, liposuction and other aesthetic procedures.
To help it during its reorganization, the company hired Piper Jaffray to assist with the exploration of “strategic alternatives.” This could potentially include a sale, a merger or new partnership. The company announced the reorganization initiative during the release of its Q3 numbers. However, the company has declined to answer further questions on the reorganization until a later time.
For the past four quarters, Solta has fallen flat in sales and revenue, posting numbers below analysts’ expectations. While aesthetic medical devices comprise a significant part of the medical device market, a high level of competition in this field has caused issues for Solta. While the company’s Liposonix fat-reduction device is a big-ticket item, the company has had to cut the price of its flagship device in response to pricing pressures from rivals. In particular, the company has faced competition from the CoolSculpting system by arch-rival Zeltiq Aesthetics.
By putting itself up for sale, Solta could potentially expand the reach of its aesthetic technologies. In 2012, there were 1.7 million cosmetic surgical procedures in the United States alone. For this year, growth in cosmetic procedures is expected to be 3%.
