Valeant Pharma Agrees to Divest Obagi Medical Products Business

Shares of Valeant Pharmaceuticals International (VRX) were barely higher pre-market Monday after the Canada-based drug maker said it agreed to sell its Obagi Medical Products business to Haitong International Zhonghua Finance Acquisiiton Fund I for $190 million in cash. The fund counts China Regenerative Medicine International as one of its limited partners.

Valeant said it will use the proceeds from the sale to repay term loan debt under its senior secured credit facility. The sale is slated to close in H2, subject to customary closing conditions, including receipt of regulatory approvals. Obagi Medical Products develops products designed to help reduce the appearance of premature skin aging, skin damage, hyperpigmentation, acne and sun damage. The business is forecast to generate revenues of $85 million and adjusted EBITDA of $30 million in 2017.

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