Shares of Cynosure (CYNO) are slipping after Allergan (AGN) announced that it is acquiring its peer Zeltiq Aesthetics (ZLTQ) for $56.50 per share. Previously, Cynosure has been reported to be exploring opportunities, including a sale, with Allergan seen by some as a likely buyer.

ACQUISITION OF ZELTIQ: Allergan and Zeltiq Aesthetics announced today that they have entered into a definitive agreement under which the former has agreed to acquire the latter for $56.50 per share, or $2.475B, subject to customary adjustments. The acquisition of Zeltiq is expected to be immediately accretive, enhancing Allergan's global medical aesthetics portfolio with the addition of Zeltiq's flagship CoolSculpting System, the sales leader in the fast-growing body contouring segment of medical aesthetics. Allergan's acquisition of Zeltiq is subject to approval by the shareholders of the latter, but assuming typical regulatory and shareholder approval timeframes, Allergan anticipates closing the transaction in the second half of 2017.

CYNOSURE M&A SPECULATION: Last month, after M&A speculation about Cynosure surfaced, Aegis Capital analyst Difei Yang said he believes $55-$65 per share was a "reasonable" takeout valuation for the company. The analyst noted that because of the early life-cycle of its Sculpsure with significant upside potential in the noninvasive fat reduction market, a premium in the "mid-30s" would be plausible, leading to his high-end estimation of $65. At the time, the analyst argued that if Cynosure was acquired, Zeltiq could had been the next one on a short list. This followed a report published on January 22 by Bloomberg saying that Cynosure was exploring strategic options, including a potential sale.

PRICE TARGET: In later morning trading, shares of Allergan have gained about 1% to $247.99, while Zeltiq's stock jumped almost 13% to $55.69. Shares of Cynosure have dropped about 6.5% to $51.53.