Newspaper article The Canadian Press

Valeant Expects to Be a Global Leader in Dermatology with Latest Acquisition

Newspaper article The Canadian Press

Valeant Expects to Be a Global Leader in Dermatology with Latest Acquisition

Article excerpt

Valeant buys U.S. dermatology firm for $2.6B

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MONTREAL - Valeant Pharmaceuticals International Inc. expects to strengthen its position as a global leader in dermatology products with the $2.6-billion acquisition of U.S.-based Medicis Pharmaceutical Corp.

Valeant (TSX:VRX) has agreed to pay $44 per share for Medicis in a $2.6-billion cash deal, the Quebec-based company said Tuesday. That's a 39 per cent premium over Friday's closing price of $31.87 for the Scottsdale, Ariz. company.

Shares in Valeant surged almost 15 per cent, or up $7.47, to $57.94 on Tuesday at the Toronto Stock Exchange.

Valeant CEO Michael Pearson said his company had been looking at acquiring Medicis for the last 18 months.

"Importantly, this combination represents a significant next step in our journey to become a global leader in dermatology, strengthening our presence in medical dermatology and bringing us to critical mass in esthetics," Pearson said during a conference call.

Medicis' portfolio complements Valeant's portfolio, he said, citing the areas of acne medication and injectable dermal fillers in esthetic products.

"We look forward to leveraging Medicis, a well-known and respected name in dermatology, to drive long-term growth," Pearson told analysts.

The boards of both companies have approved the deal but the takeover needs the approval of Medicis shareholders as well as regulatory clearance. The companies hope to complete the transaction in early 2013.

The combined company's commercial dermatology operations would be based in Scottsdale and will operate under the Medicis name, the companies said. Its research and development operations would operate in Canada, Arizona and California. Corporate support functions would be based mostly in New Jersey.

The chairman and CEO of Medicis, Jonah Shacknai, called the offer compelling and said the combined portfolio of products under the Medicis name would be enable the combined company to capitalize on opportunities in the markets for dermatology and esthetic treatment products.

Medicis' prescription brands include Solodyn, Perlane, Ziana and Dysport.

Valeant said it expects the deal to immediately add to its earnings and begin producing annual cost savings of at least $225 million within six months of the deal closing. …

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