Valeant to acquire Salix Pharmaceuticals

Valeant Pharmaceuticals International, Inc., and Salix Pharmaceuticals, Ltd., have announced an agreement that Valeant will acquire the outstanding common stock of Salix for a $158 per share cash transaction, representing an estimated $14.5 billion total enterprise value, according to a press release.

Salix is recognized as a gastrointestinal market leader with 22 products in its portfolio including Xifaxan (rifaximin), Uceris (budesonide), Relistor (methylnaltrexone), Apriso (mesalamine) and a pipeline of new assets, the release said. Valeant is a multinational specialty pharmaceutical company with dermatology, eye health, and neurology products and branded generics in its portfolio.

“Salix’s market-leading gastrointestinal franchise is an ideal strategic fit for Valeant’s diversified portfolio of specialty products,” J. Michael Pearson, chairman and CEO of Valeant, said in the release. “The growing GI market has attractive fundamentals, and Salix has a portfolio of terrific products that are outpacing the market in terms of volume growth and a promising near-term pipeline of innovative products. With strong brand recognition among specialist GI prescribers, a highly rated specialty sales force, and a significant product and commercial presence across the undertreated and underserved gastrointestinal market, the acquisition offers a compelling opportunity for Valeant to create a strong platform for growth and business development.”

Run rate cost synergies are expected to save more than $500 million from the combined company’s cost base within 6 months of closing and a more than $500 million dollar net impact on this year’s revenues from Salix’s excess inventory is expected, the release said. Additionally, it was noted that there are no plans to reduce Salix’s specialty sales force or hospital, key account and field reimbursement teams.

“We are pleased to have reached an agreement with Valeant, which is a logical partner and importantly, creates immediate value for our shareholders,” Thomas W. D’Alonzo, chairman of the board and acting CEO of Salix, said in the release. “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. We are proud of the accomplishments of our Salix team. Together, we have built our company into the leading gastrointestinal specialty pharmaceutical company, providing solutions for patients and healthcare providers. We look forward to working with the Valeant team to ensure a smooth transition.”

No changes in Valeant’s credit ratings are expected, and the transaction is expected to close in the second quarter of 2015 and is subject to closing conditions and regulatory approval, the release said.