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TORONTO - Venus Concept Inc. (NASDAQ: VERO), a leader in medical aesthetic technology, has agreed to sell its Venus Hair division to South Korea’s Meta Healthcare Group (MHG Co. Ltd) for $20 million in cash - a significant sum considering the company’s current market capitalization of just $3.34 million. This transaction, subject to customary adjustments, is aimed at bolstering Venus Concept’s balance sheet and funding growth initiatives. According to InvestingPro data, the company has been operating with a significant debt burden and rapidly burning through cash.
The sale to MHG, known for its expertise in aesthetic medicine, includes the ARTAS and NeoGraft hair restoration technologies. Venus Concept’s CEO Rajiv De Silva believes this move will allow the company to concentrate on its core medical aesthetics business, potentially leading to increased revenue growth and a quicker path to profitability. This strategic shift comes as the company faces challenging financial metrics, with InvestingPro data showing a revenue decline of 16.79% in the last twelve months and an EBITDA of -$25.09 million.
MHG’s CEO Soohyun Kim expressed enthusiasm for the acquisition, highlighting the strategic fit with their expansion goals in hair loss solutions and the potential to enhance their R&D and manufacturing capabilities.
The deal involves the transfer of Meta Robotics LLC, a Venus Concept subsidiary, to MHG, along with related assets and intellectual property. MHG will also take over the San Jose, California-based manufacturing and R&D facility and assume rights to manufacture NeoGraft.
Venus Concept’s hair business generated approximately $12.5 million in revenue in fiscal 2024, with an operational cash use of about $6.7 million, according to company estimates. The transaction is expected to close in the third quarter of 2025, subject to the fulfillment of certain conditions.
The agreement grants Venus Concept a perpetual, royalty-free license to a subset of the transferred patents, ensuring a continued benefit from the technologies sold.
The deal comes as part of Venus Concept’s ongoing strategy to maximize shareholder value, with the company continuing to evaluate other strategic alternatives. Canaccord Genuity and Dorsey & Whitney LLP are advising Venus Concept on the transaction, while MHG is counseled by Fredrikson & Byron P.A. and Bae, Kim & Lee LLC.
This divestiture is based on a press release statement and additional information will be provided in a Current Report on Form 8-K to be filed with the United States Securities and Exchange Commission.
In other recent news, Venus Concept Inc. has completed a registered direct offering, raising approximately $1.57 million through the sale of 386,700 shares of common stock at $4.06 per share. This follows a previous offering that closed earlier, bringing total gross proceeds to around $2.7 million, with funds earmarked for general corporate purposes. The company has also secured an additional $2 million in funding through its ongoing Bridge Financing agreement with Madryn Health Partners, contributing to a total of $23.2 million raised through this arrangement. Furthermore, Venus Concept has strategically reduced its debt by 54% over the past year, converting $11 million of subordinated convertible notes into Series Y preferred stock, decreasing its total debt from $76.7 million to approximately $35.5 million. CEO Rajiv De Silva highlighted this move as part of efforts to optimize the company’s capital structure. H.C. Wainwright & Co. served as the exclusive placement agent for the recent stock offerings. The company’s financing activities underscore its focus on maintaining liquidity and supporting operational needs. These developments reflect Venus Concept’s ongoing efforts to enhance financial health and operational efficiency.
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