Canada's Valeant on hunt for more deals, posts loss

Thu Feb 28, 2013 11:27am EST
 
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By Rod Nickel

(Reuters) - Valeant Pharmaceuticals International Inc VRX.TO is in talks to make more acquisitions, its chief executive said on Thursday, adding that Canada's largest publicly traded drugmaker also remains open to discuss a potential "merger of equals."

Valeant has made about a dozen deals for smaller companies or assets over the past year, including the $2.6 billion purchase of U.S.-based Medicis Pharmaceuticals Corp in December.

Valeant's shares and revenue have soared, although it posted a quarterly loss on Thursday due to costs related to the Medicis acquisition.

"We continue to be in active conversations for both large and small deals, but the timing of deals is unpredictable," CEO Michael Pearson said on a conference call with analysts to discuss the fiscal fourth-quarter results.

Pearson repeated a comment he made in early January that Valeant is open to a "merger of equals."

"I don't think it's too big a surprise that they're looking at acquisitions, but the magnitude that they're signaling is a little bit of a surprise," said Morningstar analyst David Krempa. "By bringing (a merger of equals) up again makes it seem much more likely."

Valeant stock dropped 29 Canadian cents to C$67.96 in morning trading on the Toronto Stock Exchange. Shares of the company, which has a market capitalization of C$20.28 billion ($19.7 billion) are up about 15 percent for the year so far.

Krempa said a huge deal might raise some concern, but he noted the company has a strong track record in acquisitions that add to earnings.   Continued...