Sientra to lay off 245, sell assets to Tiger Aesthetics

IRVINE, Calif.—More than 245 workers will be laid off at two Sientra Inc. facilities, in concert with the breast implant manufacturer's Feb. 12 Chapter 11 filing, the firm said in a separate April 19 WARN notices to workers in Irvine and Franklin, Wisc.

About 128 workers in Franklin, 57 workers in Irvine and about 60 sales employees will be affected by the closures. Most of the layoffs are effective June 18, or within 14 days of that, according to the WARN notices.

"The company will be terminating its operations," Sientra stated in the notice. "The company will be terminating the employment of all employees, including all employees employed at or reporting to the Irvine facility; all employees employed at or reporting to the company's facility located (in) Franklin; and all sales employees."

Some employees may be retained by Tiger Aesthetics Medical L.L.C., a San Antonio-based biomedical firm that has agreed to purchase most of the assets of Sientra for $42.5 million.

This deal was expected to be finalized April 22, according to an April 18 8-K SEC filing by Sientra.

"This acquisition underscores our dedication to be a powerful player in the aesthetics market," Tiger Aesthetics Medical CEO Oliver Burckhardt stated in a LinkedIn post.

A second suitor, Nuance Intermediary L.L.C., also entered a purchase agreement for certain assets of Sientra, namely its Biocorneum unit, which sells scar-healing products.

Nuance purchased this division for $8 million, a transaction that closed April 17, according to the 8-K filing.

Both transactions occurred as Sientra is in the midst of Chapter 11 bankruptcy proceedings, and the results of these proceedings could affect the business assets that are shifting from Sientra to Tiger and Nuance.

"The company cautions that trading in its securities during the pendency of the Chapter 11 cases is highly speculative and poses substantial risks," the 8-K states. "Trading prices for the company's securities may bear little or no relationship to the actual recovery, if any, by holders of the company's securities in the Chapter 11 cases.

"In particular, the company expects that its equity holders could experience a significant or complete loss on their investment, depending on the outcome of the Chapter 11 cases."

In its initial, voluntary, Feb. 12 Chapter 11 filing, Sientra said it planned to pursue sale of the company moving forward.

According to the April 18 8-K, other uncertainties brought by the bankruptcy proceedings include:

• Sientra's ability to obtain court approval from the bankruptcy court with respect to motions or other requests made throughout the Chapter 11 proceedings;
• Sientra's ability "to consummate a sale of all or substantially all of the company's assets (which it subsequently has done);"
• The aggregate effects of the Chapter 11 case, "including increased legal and other professional costs necessary to execute the sale of all or substantially all of the company's assets;"
• The effects of the Chapter 11 proceedings on the interests of various constituents; and
• The length of time that Sientra will operate under Chapter 11 protection.

Started in 2003, Sientra produces and sells silicone breast implants and breast tissue expanders, as well as a fat-transfer system, all product lines with applications in elective augmentation procedures.

Lubrizol Life Science sold its silicone breast implant manufacturing facility in Franklin to Sientra in 2019 for $20 million, bringing the Midwest location into the fold for Sientra.

Customers for Sientra include board-certified plastic surgeons and hospitals, according to Sientra's website.

According to Sientra, the company saw an initial run on elective procedures during the pandemic, however sales quickly curtailed in subsequent financial terms.

In a 2022 SEC filing, the company posted a net sales loss of more than $50 million, following that up with a $37 million loss in the third quarter of 2023.

The company has not yet released its year-end 2023 financials, according to the April 18 8-K filing.

On Feb. 12, Sientra ultimately filed voluntary petitions "to commence proceedings under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware."

One day later, Sientra filed a "bid procedures" motion with the bankruptcy court for sale of the company and its assets were deemed "free and clear of all encumbrances."

The Delaware court then issued an order March 5 approving the bid procedures motion, and on March 28, Sientra conducted an auction that ultimately saw Tiger Aesthetics and Nuance Intermediary as the successful bidders.

The bankruptcy court conducted a sale hearing April 10 and a day later "issued orders approving the company's entry" into the Tiger and Nuance sales orders.