Valeant to sell iNova unit for $930 mln to Pacific Equity, Carlyle: Reuters

Canada’s Valeant Pharmaceuticals International Inc said it would sell its iNova Pharmaceuticals business for US$930 million, as CEO Joseph Papa steps up efforts to slash the embattled drugmaker’s huge debt pile.

INova, which Valeant bought in 2011 from Australian private equity firms Archer Capital and Ironbridge, will be sold to a company jointly owned by Pacific Equity Partners and Carlyle Group, Valeant said.

Valeant’s long-term debt climbed to more than US$30 billion after a furious spate of deal-making under former CEO Mike Pearson, whom Papa replaced in April last year.

Pearson’s acquisition spree sent shares from the U$20 range to US$257 in 2015, before the stock went into a tailspin as Valeant’s pricing strategy and ties to a specialty pharmacy led to broader political and regulatory scrutiny.

Under Papa’s stewardship, the company is focusing on its dermatology, eye care and gastrointestinal units while pruning other assets to repay its towering debt, which stood at US$28.54 billion as of March 31.

Last month, Papa told shareholders that the company is on pace to meet its target of repaying US$5 billion in debt between August 2016 and February 2018.

The deal to buy iNova, which markets weight and pain management, cardiology and cough and cold products, is expected to close in the second half of this year.

Goldman Sachs & Co was Valeant’s financial adviser, while Baker McKenzie was its legal adviser.

In January, Valeant agreed to sell its Dendreon cancer treatment business and three skincare brands for US$2.12 billion. That deal is expected to close in the middle of this year, Papa said.

Bloomberg reported on Tuesday that Valeant was in talks to sell its Bausch & Lomb unit’s surgical products business. Its eye-surgery assets may be valued at about US$2 billion in a sale, the report said.

Valeant was also exploring the sale of its Salix stomach-drug business and other assets, but talks with Takeda Pharmaceutical Co Ltd had stalled over price disagreements, Reuters reported in November. Reports have said Salix could fetch Valeant as much as US$10 billion.

The company’s New York-listed shares were up 7.9 percent at US$13.13 in morning trading on Thursday.

Update: Washington D.C.-based Carlyle is one of the world’s largest buyout firms. Pacific Equity is an Australasian private equity investor.

In a statement, Pacific Equity Managing Director David Brown said that his firm and Carlyle plan to build “on iNova’s diversified healthcare platform by investing in product development, geographical expansion, marketing, staff and potential acquisitions of additional brands.”

(Reporting by Divya Grover; Additional reporting by Natalie Grover; Editing by Shounak Dasgupta and Sai Sachin Ravikumar)

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

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