Valeant to buy Salix

Valeant Pharmaceuticals International, Inc. is a publicly traded pharmaceutical company based in Montreal, Canada. The company focuses on neurology, dermatology, and infectious disease with several drugs in late stage clinical trials and several currently on the market. Salix Pharmaceuticals Inc. is a specialist American Pharmaceutical Company. It develops drugs and medical devices that prevent and treat various gastrointestinal disorders.

In a most recent deal, Valeant announced a $14.6 Billion cash deal to acquire Salix. While, Valeant has completed roughly 40 acquisitions since 2008, giving it a diversified portfolio of some 1,500 drugs in every conceivable branch of medicine. In spite of Valeant more than doubling its share count over the last five years to help fund its acquisitions, it has a truckload of debt. The company trimmed a total of $1 Billion from its previous $16.3 Billion debt load.

The company said the deal had an enterprise value of $14.5 Billion, which would include Salix’s debt and any cash on hand. Valeant will pay $158.00 a share, valuing all cash transaction at about $10.1 Billion. The merger is expected to yield more than $500 Million in annual cost savings within six months.

The deal is the largest ever for Valeant, which lost a takeover contest for Allergan Inc. last year. Valeant also released its fourth quarter results with the announcement, posting net income of $534.1 Million, or $1.56 per diluted share, compared to $125.0 Million in the year earlier period, or 36 cents per diluted share. Revenue rose to $2.28 Billion, up from $2.06 Billion in the fourth quarter of 2013.