Valeant nabs skin-care specialist Obagi for $344M

Valeant Pharmaceuticals ($VRX) is socking another $350 million or so into the dermatology business. It's picking up the skin-care company Obagi Medical Products for $344 million in a $19.75-per-share buyout--just a few months after closing its $2.6 billion deal for Medicis Pharmaceutical.

Medicis added some big dermatology products to Valeant's offerings, including a Botox competitor dubbed Dysport and the wrinkle-filler Restylane. Medicis also brought the acne drug Solodyn to the mix. With Obagi, Valeant gets a host of skin-care products, including anti-aging creams and serums sold by dermatologists. Obagi also sells acne fighters and rosacea treatments.

So, Obagi will leverage Valeant toward its goal of leading the dermatology field, not only with its cosmetic-focused products, but with its network of contacts in the physician community. "Obagi ... enjoys a strong brand perception among physicians," CEO J. Michael Pearson said in a statement. "[T]heir products will ... expand our market presence with dermatologists and plastic surgeons."

The Obagi deal follows a long list of transactions engineered by Pearson in his quest to make Valeant a built-by-acquisition powerhouse. Recently, Pearson said he's aiming for $10 billion in sales--a big leap from his expected $4.8 billion this year.

That, of course, will require more dealmaking. And that's not without its costs. Valeant posted a loss for the fourth quarter of 2012 because of costs related to its recent deals. And Pearson has caught some flak about Valeant's debt load, but he pooh-poohs those fears.

As with previous deals, the Obagi buyout comes with a cost-cutting target. Valeant says it sees at least $40 million in annual "synergies." The company expects to shave those costs "within 6 months of closing," it said in a statement. At Medicis, the layoffs and shutdowns began immediately after the deal wrapped.

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