Canada's Valeant to buy Salix in $10.1 billion deal
By Herbert Lash
NEW YORK (Reuters) - Canada's Valeant Pharmaceuticals International Inc agreed to acquire gastrointestinal drugmaker Salix Pharmaceuticals Ltd 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 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 on buying smaller, private companies in 2015.
Pearson said in the release that Salix, based in Raleigh, North Carolina, was an "ideal strategic fit" for Valeant.
The failure to acquire Botox-maker Allergan led Valeant to reassess its history of growth by acquisition and to target a higher stock price and debt-reduction in the next two to three quarters, people familiar with the matter told Reuters in December. Continued...