Precision Dermatology: Valeant to buy PreCision Dermatology for $475 mln; shares drop

Valeant Pharmaceuticals International Inc. (TSE:VRX), Canada's largest drugmaker, slipped in midday trade even after saying it has agreed to acquire privately held PreCision Dermatology Inc. for $475 million in cash to expand its skin care business.  Valeant fell 2.5 percent to C$147.32 at 1:20 p.m. in Toronto. PreCision, which has about 170 employees, expects to have about $130 million in revenue this year, Montreal-based Valeant said in a statement today. The deal is set to close in the first half of this year and is expected to immediately add to Valeant's cash earnings per share after closing, the company said.Valeant could pay another $25 million if a certain sales target is reached.Cumberland, Rhode Island-based PreCision Dermatology makes treatments for skin ailments such as acne and atopic dermatitis, an itchy, chronic skin inflammation.Valeant is pushing to become one of the world's top five pharmaceutical companies by market capitalization by the end of 2016, largely through acquisitions, the company said last month. In December, Valeant said that it had agreed to buy Solta Medical for about $236 million in cash to add products for procedures such as skin rejuvenation, skin tightening and body contouring to its portfolio. The stock has more than doubled over the past twelve months.  "PreCision Dermatology has a wide range of medical dermatology products, treating a number of topical disease states such as acne and atopic dermatitis, and should bring tremendous value to Valeant's medical dermatology portfolio," Valeant Chief Executive Officer Michael Pearson said in the statement.For his part, PreCision Dermatology chief executive Bob Moccia said "the combined resources of both companies will create a strengthened competitor, poised to contend with the leading companies in the dermatology market."J.P. Morgan Securities LLC acted as exclusive financial advisor to PreCision.