Valeant Pharmaceuticals (TSE:VRX) said Tuesday that it agreed to buy Lithuania-based generic drug company Sanitas (VL:SAN1L) for €314 million (US$442.4 million) in cash.
“The acquisition of Sanitas should provide Valeant with an exciting opportunity to expand our European branded generics product portfolio with dermatology and hospital injectable compounds that have a strong track record of growth and profitability,” said J. Michael Pearson, chairman and CEO of Valeant.
Under the terms of the deal, Sanitas shareholders have agreed to sell 87.2% of its outstanding shares of the company to Valeant, after which a mandatory tender offer will begin for Valeant to acquire the remaining minority interest.
The price tag for the take-over is worth €314 million (US$442.4 million), in addition to assumed debt of around €50 million, Valeant said.
On a per share basis, the price is calculated at around €10 ($14), representing a premium of about 80% to Sanitas’ closing price on Monday. On Tuesday, Sanitas’ shares surged nearly 67% to €9.25 on the Vilnius Stock Exchange.
Sanitas, based in Kuanas Lithuania, operates in nine countries right through Central and Eastern Europe, mainly in Poland, Russia and Lithuania, and has the in-house capability to develop products in the areas of dermatology, ophthalmology and hospital injectables.
Revenues for the company are expected to be over €100 million in 2011, with annual revenue growth in the low double digits expected over the ensuing years.
The deal, which remains subject to customary closing conditions, is anticipated to close by third quarter.
Valeant, which makes pharmaceuticals in the areas of neurology, dermatology and branded genetics, said the transaction is expected to be immediately accretive.
Prior to the US markets opening, shares for Valeant were trading at $48.32 as of Tuesday 8:50 a.m. EST. —Brad Lemaire