Health Care Deal News: Spotlight on Pharmaceuticals- September 2012

The only other billion-dollar deal of the month  (actually announced during the Labor Day weekend, so technically a September deal) involved a Canadian company, Valeant Pharmaceuticals International (NYSE: VRX) going south of the border to buy Arizona-based Medicis Pharmaceutical Corporation (NYSE: MRX) for $2.6 billion.  Medicis specializes in the treatment of dermatological and aesthetic conditions in the U.S and Canada, and on a combined basis, the two companies will have $1.7 billion in dermatology revenues.  The purchase appears to be expensive at 13.1x trailing 12 months EBITDA, but after $225 million of cost synergies are factored in, that EBITDA multiple drops to 6.1x, which is much more reasonable.  The cash purchase at $44.00 per share represents a 39% premium, and the assumed debt is offset by the cash on the balance sheet as of June 30.  J.P. Morgan Chase Bank, which provided financial advice to Valeant, will be providing Valeant with acquisition financing for 100% of the value. Deutsche Bank Securities and Roberts Mitani advised Medicis.  The transaction is expected to close in the first half of 2013.

In the only other sizeable transaction in August, Sun Pharmaceutical Industries (BO: SUN) announced a deal to buy Taro Pharmaceutical Industries (NYSE: TARO) for $597.4 million.  Taro is a generic drug maker with a presence in North America with revenues of $628 million.

Illinois-based Meridian Labs, a private company, has apparently received multiple expressions of interest from potential investors or buyers of the company. Meridian is a biopharmaceutical specialty company focusing on the discovery and development of cancer treatments through formulation improvements.  Management is taking this interest seriously, as they have hired AmeriTech Advisors to respond to all indications of interest...........Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today