Valeant acquires Salix for $14.5 Billion

Valeant acquires Salix for $14.5 Billion

Valeant acquires Salix for $14.5 Billion

Valeant Pharmaceuticals, the Canadian pharmaceutical company, has agreed to pay $ 10.4 Billion for Salix Pharmaceuticals, or $ 158 a share in cash, the transaction including debt is total valued at about $ 14.5 Billion.

 This deal came after unsuccessfull try to acquire Botox maker Allergan last year. Valeant is known as an aggresive buyer of smaller drug companies.

 After speculation of deal Salix’s share price rose up 50 percent in the last three months.

 Allergan almost bought Salix late in the summer, but probably was this deal for Allergan too expensive, instead of  Allergan agreed to acquire by Actavis for $ 66 Billion in November last year.

 The deal was also competition with Shire, a British drug maker, was seriously conteplating a takeover of Salix.

 “This happened all quite quickly,” Mr. Pearson said in an interview on Sunday. “One of the reasons we were able to get this deal done is because we were prepared to move fast.”

 Mr. Pearson also said Valeant would save MONEY by reducing Salix’s tax rate. Valeant has an effective tax rate of just 4 percent.

Chairman and acting executive at Salix Thomoas W. D’Alonzo called Valeant as “a logical partner”.

 “Combining Salix’s leading market position in gastroenterology with Valeant’s scale and resources will create a stronger and more diverse business committed to providing better health solutions to health care providers and their patients,” Mr. D’Alonzo added in a statement.

 Valeant reported 16 percent growth in most recent quarter, with revenues and earnings above analyst expectations.

 “What we have shown is that our business is just fine,” Mr. Pearson said, adding that Valeant would report Salix’s financial results separately after the deal was completed, so investors could observe how the business fared in Valeant’s hands. “Our organization feels that a lot of the allegations that were made were just not true.”

 Valeant was financing from banks Deutsche Bank and HSBC, which were financial advisers too. Sullivan & Cromwell provided legal advice. JPMorgan and Centerview Partners advised Salix and Cadwalader, Wickersham & Taft provided legal advice.

 Both comapnies expected to close the deal in the second quarter of this year.

Mr. Stakebay says :

 By acquisition of Salix, Valeant reach another products to its portfolio. Valeant always prefers acquiring  products than spending billion on research and development to discover new drugs. By the words of companies combination helps to cost savings at least $500 Million witihn six months, mostly includes reducing overhead and research and development expenses.

 

 

Valeant Pharmaceuticals

Salix Pharmaceuticals

Revenue

$ 5.769 Billion (2013)

$ 993.838 Million (2013)

Operating income

$ – 409.502 Million (2013)

$ 271.713 Million (2013)

Profit

$ – 866.142 Million (2013)

$ 143.034 Million (2013)

Total assets

$ 27.97 Billion (2013)

$ 2.941 Billion (2013)

Total Equity

 $ 5.118 Billion (2013)

$ 740.866 Million (2013)

Employees

17 000 (2013)

555 (2013)

 

Chairman and CEO of Valeant Pharma…….. J. MICHAEL PEARSON……..2008-present……$ 6 997 734 (2013)

Acting CEO and Chairman of Salix Pharma…..THOMAS W. D’ ALONZO…..2015-present……..$ 345 157 (2013)

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