Canada's Valeant to acquire Salix in $10.1 billion deal
By Herbert Lash
NEW YORK (Reuters) - Canada's Valeant Pharmaceuticals International Inc (VRX.TO: Quote) (VRX.N: Quote) agreed to acquire gastrointestinal drugmaker Salix Pharmaceuticals Ltd SLXP.O in an all-cash deal valued at about $10.1 billion, the two companies said on Sunday.
The deal for Salix, known for its irritable bowel syndrome drug Xifaxan, was approved by the boards of directors of both companies, the companies said in a news release.
The companies said the deal had an enterprise value of $14.5 billion, which would include Salix's debt and any cash on hand. Valeant will pay $158.00 a share, valuing the all-cash transaction at about $10.1 billion.
The merger is expected to yield more than $500 million in annual cost savings within six months, the release said.
The transaction is expected to close in the second quarter of 2015, and is subject to customary closing conditions and regulatory approval.
The deal is the largest ever for Laval, Quebec-based Valeant, which lost a takeover contest for Allergan Inc (AGN.N: Quote) last year. The usually acquisitive Valeant slowed its buying pace dramatically while it pursued Allergan, and Chief Executive Michael Pearson said last month that it would focus in 2015 on buying smaller, private companies.
Pearson said in the release that Salix, based in Raleigh, North Carolina, was an "ideal strategic fit" for Valeant.
Valeant also released its fourth-quarter results with the announcement, posting net income of $534.1 million, or $1.56 per diluted share, compared to $125.0 million in the year-earlier period, or 36 cents per diluted share. Continued...