Valeant to Sell Skincare Brands to L'Oreal -- Update
January 10 2017 - 3:30AM
Dow Jones News
By Dana Mattioli and William Horobin
Valeant Pharmaceuticals Inc. agreed to sell three skin care
brands including CeraVe to French cosmetics giant L'Oréal for $1.3
billion, the latest effort by the beleaguered drugmaker to unload
assets and pare debt.
The sale of the brands to L'Oréal follows swiftly on Valeant's
agreement on Monday to sell its Dendreon cancer business to Chinese
conglomerate Sanpower for $820 million.
The asset sales are part of new Valeant Chief Executive Joseph
Papa's efforts to focus the company on its key franchises in skin
drugs, stomach treatments, eye care and consumer health, while
either selling noncore assets or milking them for cash to pay down
$30 billion in debt.
Valeant has put a number of assets on the auction block, but has
struggled to strike sale agreements at acceptable prices. Most
notably, it came close but ultimately failed to seal a deal to sell
stomach-drug maker Salix Pharmaceuticals Ltd. to Japan's Takeda
Pharmaceutical Co. for $10 billion.
"We are pleased to announce the progress we are making in
reshaping our product portfolio and driving value for our
shareholders," said Mr. Papa in a statement on Tuesday.
The completion of both deals is dependent on regulatory approval
and other conditions. Valeant said it expects the transaction with
L'Oréal to close in the current quarter.
The CeraVe brand includes cleansers, moisturizers and healing
ointments. The other brands--AcneFree and Ambi--distributes a range
of acne treatments. L'Oréal, one of the world's leading cosmetics
suppliers, said the three brands have an annualized combined
revenue of around $168 million.
Dendreon, acquired by Valeant under former Chief Executive
Michael Pearson, is known for prostate-cancer treatment Provenge.
Valeant bought the business for about $500 million in a bankruptcy
auction in 2015. The acquisition was Valeant's first big
transaction after losing a hostile bid in 2014 for Botox maker
Allergan, which went instead to Actavis PLC for about $67
billion.
Valeant wasn't a big player in cancer, and Provenge proved a
disappointing fit. Provenge had $300 million in sales the year
before the acquisition; it isn't clear what revenue has been more
recently.
The company's acquisition spree came to a halt when an
accounting scandal engulfed it in late 2015. That has helped pummel
the Canadian drugmaker's shares, which topped out at over $250 in
2015 and closed Monday at $15.35, giving Valeant a market value of
just over $5 billion.
Sanpower is a sprawling group with a range of holdings. It
teamed up in 2014 to buy Brookstone Holdings Corp., known for
selling massage chairs, travel gadgets and other novelties, for
more than $100 million at a bankruptcy auction. Sanpower, which
owns one of China's oldest department stores, had been on an
international acquisition spree, also agreeing to buy House of
Fraser, a 165-year-old department-store chain, in a deal that
valued the U.K. company at $745 million.
--Jonathan D. Rockoff and David Benoit contributed to this
article.
Write to Dana Mattioli at dana.mattioli@wsj.com and William
Horobin at William.Horobin@wsj.com
(END) Dow Jones Newswires
January 10, 2017 04:15 ET (09:15 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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