MONTREAL – Valeant Pharmaceuticals International, Inc. (TSX:VRX) has signed a deal to buy Obagi Medical Products Inc. (Nasdaq:OMPI) in a deal that values the U.S. maker of skin health products at more than US$340 million.
Valeant says it has offered $19.75 per share for all the more than 17.41 million Obagi shares, a 28 per cent premium to the issue’s closing price on Tuesday.
Stock in Obagi soared $4.30 cents, or 27.94 per cent, to US$19.69 on the Nasdaq in trading Wednesday after the announcement. Valeant shares were up $2.11, or 2.88 per cent, to C$75.46 on the Toronto Stock Exchange.
Obagi had total revenue of approximately $120 million in 2012.
“Our board of directors has determined that this all cash offer is in the best interest of our stockholders and validates both the hard work from our employees and our brand’s unique leadership position within the market,” Obagi president and chief executive Albert Hummel said in a statement.
The Obagi board recommended shareholders tender their stock to the offer.
The deal is expected to close in the first half of 2013 and Valeant says the transaction will immediately add to its cash earnings per share.
“The acquisition of Obagi will be a valuable supplement to Valeant’s current dermatology portfolio and will further build upon our growing esthetics franchise,” Valeant chairman and CEO Michael Pearson said in announcing the deal.
“Obagi is a leader in the physician dispensed market and enjoys a strong brand perception among physicians. The addition of their products will not only strengthen and diversify our dispensed portfolio, but also expand our market presence with dermatologists and plastic surgeons.”
Montreal-based Valeant, formerly Biovail Corp., develops, manufactures and sells a broad range of pharmaceutical products primarily in the areas of dermatology, neurology and branded generic drugs.