Valeant Pharmaceuticals International, Inc
) recently announced that the company has entered into a
definitive agreement to acquire all of the outstanding common
Obagi Medical Products, Inc.
) for $19.75 per share in cash.
The offer price represents a 28% premium to Obagi's closing
share price on Mar 19, 2013. Valeant Pharma expects to close the
transaction, which has been approved by Obagi's board, in the
first half of 2013.
The acquisition is expected to be immediately accretive to
Valeant Pharma's cash earnings per share. Valeant Pharma also
expects the acquisition to generate cost synergies of $40 million
on an annual basis within six months of closing.
Obagi develops markets and sells products, which prevent or
improve the most common and visible skin disorders. 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 Pharmaceuticals, a Canada-based specialty
pharmaceutical company, develops, manufactures and markets
multiple pharmaceutical products primarily in the fields of
dermatology, neurology and branded generics.
Hence, the impending acquisition of Obagi is a strategic fit
for Valeant Pharma, which will further augment and diversify its
We note that acquisition activity has been quite strong in
recent times in the dermatological segment. In Dec 2012,
Valeant Pharma acquired the entire outstanding common stock of
Medicis Pharmaceutical Corporation for approximately $2.6
The erstwhile Medicis Pharma focused on the development and
marketing of products for the treatment of dermatological and
aesthetic conditions in the US.
In addition, Valeant Pharma closed the acquisition of
Russia-based Natur Produkt International, JSC for $163 million in
On the other hand,
) acquired privately-held SkinMedica, Inc. in Dec 2012 with a
focus on the latter's topical aesthetics skin care business.
Valeant Pharmaceuticals currently carries a Zacks Rank #3
(Hold). Right now,
Furiex Pharmaceuticals Ltd
) is better positioned with a Zacks Rank #2 (Buy).
ALLERGAN INC (AGN): Free Stock Analysis
FURIEX PHARMACT (FURX): Free Stock Analysis
OBAGI MEDICAL (OMPI): Free Stock Analysis
VALEANT PHARMA (VRX): Free Stock Analysis
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