Canadian drug maker Valeant Pharmaceuticals International, Inc. (VRX,VRX.TO) agreed Friday to acquire specialty oral health company OraPharma, Inc. from its owner private equity firm Water Street Healthcare Partners LLC for a total consideration of $426 million, including milestone payments. The deal is expected to close later in the month of June, and is expected to be accretive in 2012.
"We are excited to enter a new attractive market segment with an already established sales infrastructure focused entirely on the dental community," Valeant Chairman and CEO Michael Pearson said in a statement.
"We believe that this market segment has similar characteristics to the dermatology, podiatry and ophthalmology markets and should offer us the opportunity to cross-sell some of our current products, most notably our new topical prescription cold sore medication, Xerese," Pearson added.
Mississauga, Ontario-based Valeant is a pharmaceutical company focused on the neurology and dermatology therapeutic areas. The proposed deal will provide Valeant with a new growth platform and diversification into the dental industry to build additional opportunities in the future.
Water Street is a strategic private equity firm focused exclusively on health care. Water Street acquired OraPharma from Johnson & Johnson (JNJ) in January 2011. Terms of the transaction weren't disclosed. OraPharma became a subsidiary of Johnson & Johnson in 2002.
OraPharma is a leader in oral health pharmaceuticals. Its flagship product, Arestin, is the leading locally administered antibiotic used by dentists for procedures that treat periodontitis. OraPharma has one of the largest specialty sales forces in the dental industry, generating annual net revenue of about $95 million.
VRX closed Thursday's regular trading session at $45.95, up $0.62 on a volume of 1.95 million shares. Meanwhile, VRX.TO closed on the TSX at C$47.06, up $0.40 on a volume of 0.45 million shares.
by RTT Staff Writer
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