Medical aesthetics company Solta Medical has acquired CLRS Technology, maker of the Claro device that uses heat and light to combat acne.
This story first appeared in the October 22, 2010 issue of WWD. Subscribe Today.
CLRS gives Solta Medical, which generated nearly $100 million in revenues last year through the sale of systems Fraxel and Thermage for dermatological procedures, an entrance into the over-the-counter personal care segment. The company will assume around $1.1 million of CLRS’ debt at the deal’s closing and make future payments of undisclosed amounts based upon CLRS’ revenue and operating income through the end of 2011.
“We are the first home-use device company to be backed by a publicly traded company that is in the aesthetic marketplace,” said Richard Oberreiter, chief executive officer and founder of Costa Mesa, Calif.-based CLRS Technology. “What you have seen to date out there [in at-home devices] with the Zeno, Tanda, Tria and some other stuff is just the tip of the iceberg. We think that we are getting a real leg up with having a publicly traded company with deep research and development behind it to really make a splash.”
The Claro initially hit Nordstrom in October of last year priced at $250, but a second-generation device at $195 is now rolling out to the department store retailer with slightly lowered heat output to reduce discomfort and new marketing materials that detail the sensation felt by Claro users. Oberreiter said Sephora has made a commitment to carry Claros starting in the first quarter of next year.
The Claro is the first acne treatment device sold at retailers that harnesses Intense Pulsed Light (IPL) to receive approval from the U.S. Food and Drug Administration, according to CLRS. Oberreiter wouldn’t discuss retail sales since its launch in October, but industry sources have pegged them at less than $5 million.
Earlier this year, James Pereya, chief marketing officer at CLRS, said CLRS intends to keep the Claro in prestige distribution for the foreseeable future, even though competitor Zeno has blanketed mass retailers such as Target and Wal-Mart with the Zeno Hot Spot. He said the company estimates the Claro will be sold at 1,000 doors by the fourth quarter of 2011, when CLRS also expects to begin turning a profit.
Like the Claro did with IPL, Pereya described upcoming CLRS products as over-the-counter versions of offerings in doctors’ offices. He said the company had three devices in the pipeline, two in the aesthetics arena. “Our competency is taking these [medical aesthetics] devices, shrinking them down and getting them approved,” said Pereya.