Montreal-based Valeant Pharmaceuticals International and Medicis Pharmaceutical of Scottsdale, Ariz., have entered into a definitive agreement under which Valeant will acquire all of the outstanding common stock of Medicis for $44 per share in cash. The transaction, which values Medicis' common stock at approximately $2.6 billion, was unanimously approved by the boards of both companies. The $44 price represents a 39% premium to Medicis' closing share price Friday, Aug. 31, the last trading day prior to the announcement, and a 31% premium to the three-month average trading price. The transaction is expected to close in the first half of 2013.
Medicis' portfolio includes leading prescription brands Solodyn, Restylane, Perlane, Ziana, Dysport and Zyclara. The pro forma net revenue for the combined company's dermatology and aesthetics businesses for 2012 is expected to exceed $1.7 billion within the U.S.
“The acquisition of Medicis represents a significant next step in our journey to become the leader in dermatology by strengthening Valeant's presence in acne, actinic keratosis, aesthetic injectables and anti-virals, among others,” said Valeant chairman and CEO J. Michael Pearson. “Medicis' highly complementary portfolio of leading branded products and promising pipeline is a solid strategic fit, and we look forward to leveraging Medicis' well known and respected name in dermatology to drive long-term growth."
Jonah Shacknai, chairman and CEO of Medicis, said, "We look forward to combining our portfolio of products with Valeant, and we are confident that the combined portfolio under the Medicis name will be well positioned to capitalize on meaningful opportunities in the growing dermatology and aesthetics markets."
The transaction is subject to customary closing conditions, and Valeant expects it, once completed, to be immediately accretive to Valeant's cash earnings per share. The combination is expected to yield cost synergies at an annual run rate of at least $225 million within six months of closing.
The combined company's commercial dermatology operations will be located in Scottsdale and will operate under the name Medicis, a division of Valeant, with its dermatology R&D operations in Scottsdale; Laval, QC; and Petaluma, Calif., with corporate support functions primarily based in New Jersey.
Valeant Pharmaceuticals International is a multinational specialty pharmaceutical company that develops, manufactures and markets pharmaceutical products primarily in dermatology, neurology and branded generics.
Medicis is a U.S. independent specialty pharmaceutical company focusing primarily on the treatment of dermatological and aesthetic conditions, dedicated to helping patients attain a healthy and youthful appearance and self-image. Medicis has branded prescription products in a number of therapeutic and aesthetic categories.