Valeant Pharmaceuticals International Inc. (VRX), Canada’s biggest pharmaceutical company, agreed to buy AB Sanitas (SAN1L) for about 314 million euros ($442 million) to add dermatology drugs in eastern and central Europe.
Valeant will pay a price within a range of 10 euros to 10.18 euros a share for Kaunas, Lithuania-based Sanitas, according to a statement today from the selling shareholders, who include Citigroup Inc. (C)’s venture-capital arm. The high end of the range would amount to 83 percent more than Sanitas’s closing price yesterday on the Vilnius stock exchange.
Sanitas sells dermatology drugs and hospital-injected medicines that “have a strong track record of growth and profitability,” Valeant Chairman J. Michael Pearson said in a separate statement. The sales are shielded from government efforts to reduce drug prices because 80 percent of Sanitas’s lineup is medicines that aren’t reimbursed by government health systems, he said.
The final price of the acquisition will be calculated and announced when the transaction closes, Mississauga, Ontario- based Valeant said.
Valeant rose $1.29, or 2.7 percent, to $49.53 at 4:02 p.m. in New York Stock Exchange composite trading. Sanitas rose 3.59 euros, or 65 percent, to 9.14 euros in Vilnius. It earlier gained as much as 79 percent to 9.92 euros.
In addition to its home market, the Lithuanian company operates in Latvia, Russia, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria and Ukraine, according to Sanitas’s website. Sales in 2011 will exceed 100 million euros, with a growth rate in the “low double digits over the coming years,” Valeant said.
Invalda AB, a Lithuanian investment company, owns 24 percent of Sanitas, while Citigroup’s Citi Venture Capital International holds 18 percent. Those investors and other shareholders agreed to sell 87.2 percent of Sanitas’s outstanding shares to Valeant, which will begin a mandatory tender offer for the rest, the Canadian drugmaker said.
Jefferies International Ltd. provided financial advice to Sanitas, while Raidla Lejins & Norcous was legal counsel.