Valeant Pharma to un­load Obagi Med­i­cal for $190-mil­lion

Valeant Phar­ma­ceu­ti­cals In­ter­na­tional Inc. will un­load its Obagi Med­i­cal Prod­ucts unit for $190-mil­lion. The com­pany will use the pro­ceeds to pay down its debt.

Stockwatch Daily - - FRONT PAGE - Mr. Joseph Papa re­ports

CER­TAIN AF­FIL­I­ATES of Valeant Phar­ma­ceut icals In­ter­na­tional Inc. have en­tered into an agree­ment to sell its Obagi Med­i­cal Prod­ucts busi­ness for $190-mil­lion in cash to Haitong

In­ter­na­tional Zhonghua Fi­nance Ac­qui­si­tion Fund I LP. Lim­ited part­ners of the fund in­clude in­dus­try vet­er­ans in other ge­o­graphic mar­kets, such as China Re­gen­er­a­tive Medicine In­ter­na­tional Ltd.

“The sale of Obagi marks ad­di­tional progress in our ef­forts to stream­line our oper­a­tions and re­duce debt,” said Joseph C. Papa, chair­man and chief ex­ec­u­tive of­fi­cer, Valeant. “As we con­tinue to trans­form Valeant, we will re­main fo­cused on the core busi­nesses that will drive high value for our share­hold­ers.”

Obagi Med­i­cal Prod­ucts is a global spe­cialty phar­ma­ceu­ti­cal com­pany founded by lead­ing skin care ex­perts in 1988. Obagi prod­ucts are de­signed to help min­i­mize the ap­pear­ance of pre­ma­ture skin ag­ing, skin dam­age, hy­per­pig­men­ta­tion, acne and sun dam­age, and are pri­mar­ily avail­able through der­ma­tol­o­gists, plas­tic sur­geons, med­i­cal spas and other skin care pro­fes­sion­als. More in­for­ma­tion can be found at the Obagi web­site.

Valeant will use pro­ceeds from the sale to per­ma­nently re­pay term loan debt un­der its se­nior se­cured credit fa­cil­ity. The trans­ac­tion is ex­pected to close in the sec­ond half of 2017, sub­ject to cus­tom­ary clos­ing con­di­tions, in­clud­ing re­ceipt of ap­pli­ca­ble reg­u­la­tory ap­provals.

The com­pany cur­rently es­ti­mates that the full-year 2017 rev­enue and ad­justed earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion for the Obagi busi­ness would have been ap­prox­i­mately $85-mil­lion and $30-mil­lion, re­spec­tively.

In this trans­ac­tion, Mor­gan Stan­ley & Co. LLC served as fi­nan­cial ad­viser to Valeant, and Nor­ton Rose Ful­bright acted as le­gal ad­viser to Valeant.

About Valeant Phar­ma­ceu­ti­cals In­ter­na­tional Inc.

Valeant Phar­ma­ceu­ti­cals In­ter­na­tional is a multi­na­tional spe­cialty phar­ma­ceu­ti­cal com­pany that devel­ops, man­u­fac­tures and mar­kets a broad range of phar­ma­ceu­ti­cal prod­ucts pri­mar­ily in the ar­eas of der­ma­tol­ogy, gas­troin­testi­nal dis­or­ders, eye health, neu­rol­ogy and branded gener­ics.

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