LAVAL, Que. – Valeant Pharmaceuticals International, Inc. said it will buy a significant Egyptian pharmaceutical company for about US$800 million as a platform for further expansion in the centre East and North Africa.
The Quebec-based company reported?Friday?it features a definite agreement to purchase Amoun Pharmaceutical from Mercury (Cayman) Holdings.
Valeant CEO?Michael Pearson said he hopes the organization will be able to take advantage of both rising incomes and a growing population in the region.
“It\’s not part of the world where a large amount of the larger pharmaceutical companies have a big presence,” said Pearson in an interview with the Financial Post.
“After Amoun we\’ll be one of the largest companies on the bottom and we\’ll continue to grow.”
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Sources happen to be reporting on the negotiations since May, though Valeant would not comment on the rumours until Friday.
Pearson said Valeant decided to prioritize the Middle East and Northern Africa region in regards to a year ago. However, they merely had a small operation in the area after acquiring MedPharma in 2014, addressing between $30- and $40-million in sales annually.
“You need to get to critical mass or you’re not will make much money,” Pearson said.
Amoun Pharmaceutical may be the largest domestic company in the Egyptian pharmaceutical market and currently expects to achieve 1.75-billion Egyptian pounds (US$223 million)?in sales?after 2015.
Pearson said Valeant ought to be making more than US$500 million in revenue from the region?within the next year.
After Amoun we\’ll be one of the largest companies in that area and we\’ll still grow
“We\’ll certainly benefit from the growth of the marketplace and hopefully beat the development of the market,” he said.
The deal includes Amoun\’s manufacturing plant, which Valeant says is one of the largest and many modern in the region.
Amoun has branded products for that treatment of hypertension, infections and diarrhea, though Pearson says the organization will likely expand the regional drug portfolio by bringing in more of Valeant’s products to be manufactured on-site.
He says the company will save some money though synergies with Valeant’s existing infrastructure, but will also expand sales and marketing into other countries.
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If the transaction closes as planned, it will be Valeant\’s biggest acquisition since it paid US$11.1 billion to buy Salix Pharmaceuticals inside a deal that closed April 1 following a bidding war with Irish rival Endo International.
Pearson asserted the company’s future focus is going to be honouring its commitment to bond holders and lenders to create Valeant’s leverage?ratio below 4 times?by the other half of 2016.
“We will generate a lot of money between now and then. Some of that cash goes to reducing debt and a part of that will go to tuck-in acquisitions,” he explained.
Pearson would not comment on specific future acquisition targets, though he did say the company sees growth potential in Asia, South usa and the U.S.
“We glance across our markets and that we look for opportunities. When the right ones arrive we move quickly and get deals done,” Pearson said.
– With files from the Canadian Press