(RTTNews) - British drug major GlaxoSmithKline Plc (GSK: News ,GSK.L: News ), Monday, said it signed an agreement to acquire US-based privately held dermatology company Stiefel Laboratories Inc. in a deal valued at up to $3.6 billion, including $2.9 billion in cash, thus to create a new world-leading specialist dermatology business.

The deal, which is part of the company's strategy to grow and diversify its business, is expected to close in the third quarter of 2009, subject to certain conditions.

Under the terms of the agreement, approved by the Stiefel stockholders, GlaxoSmithKline, a research-based pharmaceutical and healthcare company, expects to assume $0.4 billion of net debt upon closing, and will pay potential further $0.3 billion in cash, contingent on future performance.

Coral Gables, Florida-based Stiefel is the world's largest privately held independent dermatology company, with more than 30 subsidiaries, six manufacturing plants and a network of nearly 3,500 driven associates. It also owns Barrier Therapeutics Inc. (BTRX: News ), which it bought in August 2008. John David Stiefel founded Stiefel in Germany in 1847.

Stiefel, which makes anti-itch creams, acne treatments and other dermatological remedies to help treat acne, dry skin, dandruff, psoriasis and rosacea among other disorders, reportedly drew interest from a number of major global drug companies, including Sanofi-Aventis SA (SNY: News ), Johnson & Johnson (JNJ: News ), and Novartis AG (NVS: News ).
Commenting on the deal, Andrew Witty, chief executive officer of GSK said, "As part of our strategy to grow and diversify GSK's business, we are continuing to make new investments through targeted acquisitions. The addition of Stiefel's broad portfolio will provide immediate new revenue flows to GSK with significant opportunities to enhance growth through leveraging our existing global commercial infrastructure and manufacturing capability."

GSK noted that it will combine its existing prescription dermatological products with Stiefel's, and the new specialist business will operate under the Stiefel identity within the GSK Group. Upon the deal closure, Charles Stiefel, chief executive officer, and chairman of the Board of Stiefel will lead the new business.

GSK pointed out that the new specialist dermatology business will have a broad portfolio of dermatology products including Stiefel's Duac for acne, Olux E for dermatitis, and Soriatane for the treatment of severe psoriasis, while GSK's key dermatology brands include Bactroban, Cutivate and recently launched Altabax.

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