UPDATE 2-Valeant to buy Obagi Medical for about $344 mln
* Valeant on buying spree over past year
* Obagi shares jump 28 pct; Valeant up 4 pct (Updates with share activity and analysts' comments)
By Esha Dey and Rod Nickel
March 20 (Reuters) - Canada's Valeant Pharmaceuticals International Inc said it would buy Obagi Medical Products Inc for about $344 million to boost its dermatology business, pushing ahead with a strategy of rapid growth through acquisitions.
The offer price of $19.75 a share represents a 28 percent premium to Obagi's Tuesday closing price on the Nasdaq.
Obagi's board has unanimously approved the deal, Valeant said in a statement on Wednesday.
Shares of Obagi jumped 28 percent to $19.69, just shy of Valeant's offer price. Valeant stock gained nearly 4 percent in early trading in New York and Toronto, to $74.28 and C$76.14, respectively.
"It makes sense and I think that's why the stock is reacting positively," said Tim Chiang, analyst at CRT Capital Group. "Their main objective is to acquire the revenues, hopefully grow the revenues and then cut costs."
Valeant, Canada's largest publicly-traded drugmaker, has been building up its dermatology and aesthetics portfolio in the United States over the past year. Continued...