Blog Coverage Valeant Sells-Off Its Skin Care Brands to L'Oreal
Upcoming AWS Coverage on Alkermes
LONDON, UK / ACCESSWIRE / January 11, 2017 / Active Wall St. blog coverage looks at the headline from Valeant Pharmaceuticals International, Inc. (NYSE: VRX) as the company announced on January 10, 2016, an agreement, where, it would sell its CeraVe, AcneFree, and AMBI skin care brands to L'Oreal S.A., the French cosmetic conglomerate, for $1.3 billion in cash. Executed as a part of the $2.12 billion sell-off, the payouts from this agreement will be used to pay down the $30 billion debt. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of Valeant Pharma's competitors within the Drug Delivery space, Alkermes PLC (NASDAQ: ALKS), is estimated to report earnings on February 23, 2017. AWS will be initiating a research report on Alkermes following the release of its next earnings results.
Today, AWS is promoting its blog coverage on VRX; touching on ALKS. Get all of our free blog coverage and more by clicking on the links below:
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Breaking down the Deal
Valeant is a specialty pharmaceutical and medical device Company engaged in the development, marketing, and manufacturing of pharmaceutical products and medical devices, which are sold in more than 100 countries.
The Canadian drugmaker announced two sell-offs in quick succession for a total payout of $2.12 billion. Initially, it announced the sale of its Dendreon unit to Sanpower Group Co. Ltd, China for $819.9 million. The announcement was closely followed by the sale of CeraVe, AcneFree, and AMBI brands to L'Oreal.
The AcneFree brand offers a comprehensive range of OTC cleansers and acne treatments in the US.
Founded in 2005, the CeraVe brand offers a complete range of advanced skincare products, which includes a dedicated baby line in addition to cleansers, moisturizers, sunscreens and healing ointments. The CeraVe brand observed an average growth of more than 20% for the past two years in the US.
AMBI brand holds a portfolio of a diversified range of skincare products, where the client base extends across multicultural consumers and includes creams, moisturizers, and cleansers in the face and body care segments. The net revenue for the brands stood at $168 million.
The Dendreon Agreement
Valeant acquired certain assets of Dendreon Corporation, under a 'stalking horse' asset purchase agreement. Executed for $296 million in cash, this agreement gave Valeant the worldwide rights to Dendreon's PROVENGE® (sipuleucel-T) product and several other assets. In an attempt to clear the $30 billion debt under its Senior Credit Facility, the Company sold off this cancer treatment unit to Sanpower Group, one of the largest privately owned conglomerates in China.
Portfolio Expansion for L'Oreal
L'Oreal views this agreement as a growth of its prospects through the Active Cosmetic division. The three brands the firm is about to acquire will be an addition to the division alongside products like Vichy and La-Roche Posay. The division in consideration is the strongest in terms of growth. The firm paid nearly eight times the brand's combined annual revenue generation of $168 million to establish itself as the global leader in the beauty industry.
Valeant observed rapid growth for the quarters in 2014-2015, with a peak price of $262.52 per share for Q2 2015 while driving an acquisition spree. However, it led to a huge pile of debt amounting up to $30.45 billion by the end of the Q3 2016. Hence, the firm now aims to clear off its debt through the sale of its non-core assets. The agreement is expected to close in the first quarter of 2017; it is subject to customary closing conditions.
Stock Performance
At the close of trading session on January 10, 2017, Valeant Pharma's stock price jumped 6.84% to end the day at $16.40. A total volume of 42.37 million shares were exchanged during the session, which was above the 3-month average volume of 18.33 million shares. The Company's share price has gained 6.22% in the past month and 12.95% on YTD basis. The net market capital for the firm stood at $5.78 billion at Tuesday's closing bell.
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