Valeant acquires Salix Pharmaceuticals for $14.5 bn

US-based specialty pharmaceutical company Valeant Pharmaceuticals International on February 22, 2015 entered into a definitive agreement to acquire all of the outstanding common stock of Salix Pharmaceuticals for $158.00 per share in cash, or a total enterprise value of approximately $14.5 billion. The transaction was approved by the Boards of Directors of both companies.
 
Salix Pharmaceuticals is a widely recognised gastrointestinal (GI) market leader with a portfolio of 22 total products, including well-known prescription brands Xifaxan, Uceris, Relistor, and Apriso, as well as a strong near- term pipeline of innovative, new assets.
 
"Salix's market-leading gastrointestinal franchise is an ideal strategic fit for Valeant's diversified portfolio of specialty products. 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, this acquisition offers a compelling opportunity for Valeant to create a strong platform for growth and business development,” said J Michael Pearson, chairman and chief executive officer, Valeant.
 
The combination is expected to yield greater than $500 million in annual cost savings from the cost base of the combined company. Synergies are expected to be achieved within six months of close, primarily from reductions in corporate overhead and R&D rationalisation, with the cost to achieve these synergies to be approximately 65%. Valeant and Salix will determine how best to integrate the two companies to leverage the combined strengths of both while ensuring a smooth and orderly transition.
 
The transaction, which is expected to close in the second quarter of 2015, is subject to customary closing conditions and regulatory approval.