Valeant, Endo chalk up new deals with $220M-plus specialty buys

It's a double dose of dealmaking today from Valeant Pharmaceuticals ($VRX) and Endo Health Solutions ($ENDP). Canada-based Valeant added another $250 million deal to its buyout tally, with a $250 million bid to buy Solta Medical ($SLTM), a maker of dermatological treatment devices. And Malvern, PA-based Endo agreed to pay up to $220 million for NuPathe ($PATH) and its brand-new migraine treatment Zecuity.

In both cases, it's the latest in a series of acquisitions. Valeant, of course, has been on the acquisition trail for several years now, racking up one buyout after another to hit $3.55 billion in 2012 revenue. Since the beginning of last year, the company has wrapped up 14 deals, including its biggest deal to date, Bausch + Lomb, for $8.7 billion.

And now, Endo appears to have adopted a similar growth-by-acquisition strategy. Not coincidentally, either, because CEO Rajiv De Silva joined Endo earlier this year from--you guessed it--Valeant. Since his arrival, Endo has snapped up two companies, the generics maker Boca Pharmacal, which it bought for $225 million, and Paladin Labs, a $1.6 billion deal that helped take Endo into a tax-advantaged Irish domicile.

NuPathe would be De Silva's third buy. Endo agreed to pay about $2.85 per share up front for NuPathe and an additional $3.15 per share if the Zecuity migraine patch hits certain sales targets. The FDA approved Zecuity, a battery-powered patch that delivers the medication sumatriptan, in January.

And De Silva has said he's eyeing more deals in the $250 million to $500 million range, with $1 billion deals not out of the question. Two weeks ago, Endo announced a new $4.3 billion debt package, partly to pay off existing debt with change-in-control payoffs triggered by the Paladin deal, partly to help pay for Paladin. Debt-financed deals are a Valeant staple, as are cost cuts, and De Silva has presided over some of those, too, with 700 layoffs and $325 million in cuts announced earlier this year.

As Piper Jaffray analyst David Amsellem told Bloomberg last month, "De Silva is very well-informed by Valeant's playbook." 

Meanwhile, Valeant CEO Michael Pearson continues his buyout streak. The latest deal for Solta Medical is small compared with Bausch + Lomb, but Valeant has engaged in small buyouts, too. And this one fits right in with Pearson's specialty treatment goals: Solta makes equipment used for aesthetic procedures in dermatologists' offices. Earlier this year Valeant snapped up Obagi, a skin care products company, and last year it wrapped up the buyout of Medicis, a cosmeceuticals company that brought along Botox competitor Dysport and the wrinkle filler Restylane.

Some wonder whether Pearson might make a move on Endo. Just before De Silva stepped into the CEO role, Endo shareholder Fidelity Investments was agitating for a sale--and Valeant was one of the rumored shoppers. 

- get the release from Valeant
- read the Endo release

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