Switzerland's Galderma Pharma, the Swiss specialty dermatology company and a joint venture between L'Oreal and Nestle SA, yesterday launched a 7.45-billion kronor ($970 million) bid for Swedish cosmetic treatment firm Q-Med.

The deal will see Lausanne-based Galderma enlarge its specialisation in anti-ageing treatments and better compete with rivals like Allergan Inc, the maker of Botox anti-ageing drug.

Stockholm-based Q-Med makes and sells high-quality medical implants for aesthetic and medical use. Most of its products are based on the company's patented technology, NASHA.

Its main products are Restylane, which is used for filling out wrinkles and contouring of lips. Q-Med also makes Macrolane, a gel that is used for enlarging breasts and body contouring without having to undergo a surgical procedure.

The company has approximately 650 employees in 20 countries and had posted revenues of 1.4 billion kroner and net income of 685 kroner last year.

Under the offer, Galderma will pay Q-Med shareholders 75 kronor a share in cash, a premium of 13 per cent to Q-Med's closing price on 10 December 2010.

The offer values Q-Med at 32.9 times earnings per share in the 12 months to end-September. That compares with a price-to-earnings ratio of about 22 times at Allergan, and 12.2 times at US partner Medicis, Reuters reported citing Thomson Reuters data.

Bengt Agerup, the founder of Q-Med, who holds 47.5 per cent stake in the company, has accepted the offer of 58.94 kronor a share, and will receive additional 16.02 kronor a share for a total of 74.96 kronor a share if certain financial and business goals are met.

The deal would make him richer by around 3 to 3.5 billion kronor (approx $500 million).

Q-Med said that its board has unanimously recommended that shareholders accept the offer, which will be made as a public offer by Galderma from about 4 January to 25 January 2011.

Created in 1981 as a joint venture between Nestlé and L'Oréal, Galderma focuses on acne, pigmentary disorders, skin cancer, rosacea, psoriasis and steroid-responsive dermatoses, onychomycosis and skin senescence.

The company's major products are Azzalure, an antiageing drug manufactured by Ipsen SA, which it markets. The drug is in direct competition to multi-specialty health care products maker Allergan's Botox.

Cetaphil comprises of a range of cleansing moisturizing and UV protective products for compromised and sensitive skin. Clobex, used in the treatment of inflammatory dermatoses such as psoriasis or atopic dermatitis.

Galderma has over 3000 employees in 31 affiliates around the world with three manufacturing sites and the largest R&D facility dedicated exclusively to dermatology.

In 2009, Galderma reported sales of €978 million, an increase of 10.8 per cent over 2008.

The proposed acquisition will be funded equally by Nestle and L'Oreal, Galderma said in a statement.