LAVAL, Que. and RALEIGH, N.C.—Valeant Pharmaceuticals International, Inc. has agreed to acquire Salix Pharmaceuticals, Ltd. for approximately $14.5 billion. The transaction was approved by the Boards of Directors of both companies.
Salix Pharmaceuticals has a portfolio of 22 total gastrointestinal products, including well-known prescription brands Xifaxan, Uceris, Relistor, and Apriso.
“Salix’s market-leading gastrointestinal franchise is an ideal strategic fit for Valeant’s diversified portfolio of specialty products,” said J. Michael Pearson, Valeant’s chairman and chief executive officer. “With strong brand recognition among specialist GI prescribers, a highly rated specialty sales force, and a significant product and commercial presence across the undertreated and underserved gastrointestinal market, this acquisition offers a compelling opportunity for Valeant to create a strong platform for growth and business development.”
The combination is expected to yield greater than $500 million in annual cost savings for the combined company. Synergies are expected to be achieved within six months of close, primarily from reductions in corporate overhead and R&D rationalization. Valeant says the cost to achieve these synergies will be approximately 65%.
Valeant said there are no planned reductions to Salix’s highly rated specialty sales forces or hospital, key account and field reimbursement teams. It will determine the optimal size of the Primary Care Sales Force through the integration process.
The acquisition is structured as an all-cash tender offer for all of the outstanding shares of Salix common stock at a price of $158.00 per share followed by a merger in which each remaining untendered share of Salix common stock would be converted into the right to receive the same $158.00 cash per share consideration as in the tender offer.
Valeant does not expect any change to its credit ratings as a result of the transaction.
The transaction, which is expected to close in the second quarter of 2015, is subject to customary closing conditions and regulatory approval.