NovaBay Pharmaceuticals signed an agreement to acquire DERMAdoctor in a $15 million deal.
WHO: Founded in 1998 by Dr Audrey Kunin and Jeff Kunin, DERMAdoctor delivers on the promise that clinical skin therapy can be fun and easy, while still delivering significant, measurable results. The brand sells more than 30 products under ranges that include Ain't Misbehavin', Calm Cool + Corrected, Kakadu C, KP Duty, and Wrinkle Revenge. DERMAdoctor sells its products through major retailers such as Macy's, QVC, and Costco, and digital beauty retailers such as SkinStore and Amazon.
NovaBay Pharmaceuticals is a biopharmaceutical company focusing on high-quality, differentiated, anti-infective consumer products: Avenova, CelleRx Clinical Reset, and NeutroPhase Skin and Wound Cleanser. NovaBay's products are formulated with its patented, pure, stable, pharmaceutical-grade hypochlorous acid that replicates the antimicrobial chemicals used by white blood cells to fight infection.
WHY: The acquisition has the potential to double topline revenue in 2022 with operational synergies and diversified product portfolio expected to drive profitability.
IN THEIR OWN WORDS: "Having evaluated various strategic opportunities to expand NovaBay's commercial presence in the beauty industry with complementary product offerings, DERMAdoctor stood out as the ideal fit commercially, while also supporting the goals of reaching profitability and enhancing stockholder value," said Justin Hall, NovaBay CEO. "This acquisition will significantly increase NovaBay's presence in the U.S. beauty market with the addition of over 30 products currently sold by DERMAdoctor, which were developed under the leadership of Dr. Audrey Kunin, a well-known leader in the skincare product industry. The DERMAdoctor skincare products have been clinically formulated to be highly effective yet gentle on skin, characteristics of our own CelleRx Clinical Reset. We plan to employ our commercial organization's expertise and industry relationships in combination with those of DERMAdoctor in order to broaden the distribution and future growth of our combined products to an expanded and more diverse customer base."
"While we expect DERMAdoctor existing product sales to double our topline revenue, the combined company platform significantly expands our opportunities for future growth. We will be investing in new products and new brands, with Dr. Audrey Kunin providing both creative and strategic direction. Along with expected revenue growth, we also expect to achieve operating and expense synergies as a result of this transaction. With higher sales and expense synergies from combining DERMAdoctor with our operations, we finally have a clear path to profitability," Hall added.
“This is truly an exciting opportunity to advance and enhance the DERMAdoctor business by introducing our clinically formulated skincare products to a larger number of prospective customers utilizing the proven sales, marketing and distribution capabilities of NovaBay," said Dr. Audrey Kunin. "We designed DERMAdoctor products with synergistic blends of science and technology to be elegant, hypoallergenic, multitasking, problem-solving and highly effective. We created DERMAdoctor to address the all-too-common skincare concerns that were overlooked by the beauty industry, providing hassle-free, highly effective, prestige treatments that are non-irritating to skin. With the infrastructure and support of NovaBay, we will be able to create, innovate, and sell like never before. We are looking forward to joining forces with the NovaBay team to drive our brands, new and old, to even greater success.”
- NovaBay Pharmaceuticals to acquire DERMAdoctor for a purchase price of $15.0 million, comprised of $12 million in cash at closing and up to an additional $3 million in earnout payments contingent upon the DERMAdoctor business achieving predetermined financial targets for the 2022 and 2023 fiscal years.
- DERMAdoctor's co-founders, Audrey Kunin and Jeff Kunin, will continue in the executive leadership of DERMAdoctor after the transaction. Dr. Audrey Kunin will serve as NovaBay's Chief Product Officer for all new product development, Dr. Jeff Kunin will remain as DERMAdoctor's President, and the entire 13-member DERMAdoctor team will continue with DERMAdoctor after the transaction.
- Dr. Audrey Kunin is expected to join the NovaBay board of directors after the closing of the transaction.
- NovaBay plans for the DERMAdoctor business to continue its operations from its current headquarters in Riverside, Missouri.
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