EXCLUSIVE: Evercore ISI Breaks Down Valeant / Salix Deal By the Numbers

Published: Feb 23, 2015

Exclusive: Evercore ISI Breaks Down Valeant / Salix Deal By the Numbers
February 19, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

A recent webinar conducted by investor analysis firm Evercore ISI on Monday's Valeant/Salix deal has broken down for market watchers just how the merger might work out in the long run for both shareholders and drug pipelines.

Valeant Pharmaceuticals International, Inc. has officially acquired Salix Pharmaceuticals for $158 per share in cash, or a total enterprise value of approximately $14.5 billion, a significant premium from the $150 per share financing it was rumored to have cobbled together last week and which reflects the multiple bids on the table.

At that sale price, Valeant would be offering Salix a $14.5 billion value, an interesting price point considering that with its net debt, Salix is currently valued at $10.9 billion. The news that Valeant was in the running pushed shares of Salix up more than 7 percent in trading over the last two weeks, as investors added value in the hopes of getting a higher bid.

The acquisition, which was approved by both companies' board of directors, comes just days after news leaked that U.K. pharmaceutical firm Shire Pharmaceuticals had also advanced its own bid for Salix. That set up a potential bidding war for the bowel-drug company, sources familiar with the deliberations told Reuters.

Evercore ISI sent investors slides that examine how the new deal might be accretive for earnings per share, how individual drugs may now be rolled out via the merged company, and just how much Valeant will depend on bowel drug Xifaxan going forward.

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The Medicines Company Will See Dynamic 2015, As Trials, Approvals Gain: Citi

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