Canada-based Valeant Pharmaceutical has acquired U.S. specialist skin care player Precision Dermatology for $475m.
The company said that it would pay an extra $25m on completion of the acquisition if certain sales targets are achieved, bringing the total price to $500m.
Rhode Island-based Precision Dermatology manufactures and markets high quality dermatology brands that including Locoid, Hylatopic, Clindagel and BenzeFoam, and is expected to record sales revenues of $140m in 2014.
Deal should be sealed by the middle of the year
The companies say they are aiming to have the transaction completed by the first half of 2014, at which point the company value will be immediately accretive to Valeant.
"PreCision Dermatology has a wide range of medical dermatology products, treating a number of topical disease states such as acne and atopic dermatitis, and should bring tremendous value to Valeant's medical dermatology portfolio," stated J. Michael Pearson, chairman and chief executive officer of Valeant.
"Furthermore, PreCision's diversified portfolio of products enjoys high physician loyalty, premium product quality and lifecycle management opportunities that will enhance our future growth strategies. We believe this acquisition will strengthen Valeant's product portfolio and solidify our position as a leader in dermatology."
Precision new has resources to grow
Valeant is one of the largest players in the global pharmaceuticals market and has annual revenues in excess of $3.5bn. In recent years it has been on the acquisition trail to grow the business, with deals focused on specialized high-margin businesses.
Precision operates in two key categories, Onset Dermatologics, which specializes in prescription therapies and Precision MC, which focuses on physician dispensed products.
"We are very excited for the opportunity to be part of the fast growing Valeant organization. The combined resources of both companies will create a strengthened competitor, poised to contend with the leading companies in the dermatology market," said Bob Moccia, chief executive officer of PreCision Dermatology.