) proposed acquisition of
Obagi Medical Products, Inc.
) received a boost with Merz Pharma Group opting out of the race
to purchase Obagi. Merz's decision ended the bidding war between
Valeant and itself.
Merz Pharma's decision came in wake of an increased
acquisition offer from Valeant Pharmaceuticals. We note
that on Apr 2, 2013, Merz Pharma offered to acquire Obagi for $22
per share in cash after Valeant proposed to acquire Obagi for
$19.75 per share on Mar 19, 2013. Subsequently, Valeant upped its
offer price to $24.00.
The increased offer price represented a 56% premium to Obagi's
closing share price on Mar 19, 2013 compared to 28% premium
offered earlier. The amended agreement was unanimously approved
by Obagi's board.
We note that Obagi develops markets and sells products, which
prevent or improve the most common and visible skin
With leading dermatology brands such as Obagi Nu-Derm,
Condition & Enhance, Obagi-C Rx, ELASTIDerm and CLENZIDerm in
its portfolio, Obagi has grown its revenues from $35.6 million in
2001 to $120.7 million in 2012.
Valeant also has a strong presence in the dermatology field.
We believe that Valeant's acquisition of Obagi, on materializing,
would further strengthen Valeant's dermatology portfolio and pave
way for new growth opportunities.
We note that acquisition activity has been quite strong in
recent times in the dermatological segment. In Dec 2012, Valeant
acquired the entire outstanding common stock of Medicis
Pharmaceutical Corporation for approximately $2.6 billion.
The erstwhile Medicis Pharma focused on the development and
marketing of products for the treatment of dermatological and
aesthetic conditions in the US.
) acquired privately-held SkinMedica, Inc. in Dec 2012 with a
focus on the latter's topical aesthetics skin care business.
Valeant currently carries a Zacks Rank #3 (Hold). Right now,
Avanir Pharmaceuticals Ltd
) looks better positioned with a Zacks Rank #2 (Buy).
ALLERGAN INC (AGN): Free Stock Analysis
AVANIR PHARM (AVNR): Free Stock Analysis
OBAGI MEDICAL (OMPI): Free Stock Analysis
VALEANT PHARMA (VRX): Free Stock Analysis
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