Published on : Feb 23, 2015
In what the industry experts believe will mark a landmark deal, Valeant Pharmaceuticals International Inc. the numero uno Canadian drug maker, have finally given their nod to buy Salix Pharmaceutical Ltd., the world renowned drug maker, in a deal that is slated to be worth approximately $14.5 billion.
Driven by low cost of operations and significant revenue growth, Valeant has also reported impressive profit for fourth quarter that surges from the year bygone. The Quebec based company has agreed to pay $158 per share for Salix Pharmaceuticals in cash. This will give the deal an enterprise value of $14.5 billion. Boards of both the companies approved the acquisition which is expected to close around the second quarter of 2015.
Valeant is eyeing to pocket cost synergies worth $500 million within the next 6 months of the deal from the combined production capacity of the companies. Additionally, the company is anticipating the deal to reap over 20% accretive to their overall cash earnings in 2016.
Salix Pharmaceuticals is one of the world’s largest and most popular producers for gastronomical products and medicines which include, Uceris, Apriso, Xifaxan, and Relistor. The company is also expecting the approval for the potential treatment of bowel syndrome anytime soon. Expressing his views on the deals, the Chief Executive Officer for Valeant, Michael Pearson said that Salix is a market leader in gastronomical products and will ideally complement the company’s diversified portfolio comprising specialty products.
The deal to acquire Salix Pharmaceuticals by Valeant marks the return of the Quebec based company to deal-making after it failed in its attempt to acquire Allergan Inc, the leading Botox maker, last year. The California based pharmaceutical company was finally acquired by Actavis plc in a deal worth $66 billion in 2014.