Aliso Viejo-based Valeant and Canada-based Biovail have agreed to a merger deal and are creating a combined company that will focus on the specialty pharmaceutical market.
Valeant Pharmaceuticals International is expected to leverage the two companies' "complementary product lines" in the central nervous system and dermatology fields, in addition to emerging markets and branded generics.
The combined firm will be headquartered in Canada and is expected to have an expanded presence throughout North America, with operations in eight other countries. The company's U.S. headquarters will be determined after the deal is finalized. It is not known whether Valeant will maintain its local base.
The combined firm's reach, financial strength and products will allow the company to seek future growth opportunities, according to a statement. Valeant Pharmaceuticals International is expected to get a double-digit revenue boost over the next year.
Under the terms of the deal, Biovail stockholders will own 50.5 percent of the company. Valeant shareholders will own 49.5 percent.
"This compelling combination will create tremendous value for stockholders of both companies as our business benefits from cost savings, greater scale, efficiencies from extending Biovail’s corporate structure, and enhanced financial strength and flexibility," said J. Michael Pearson, chairman and CEO of Valeant. He will serve as the combined firm's CEO.
Bill Wells, Biovail's Ceo, will serve as non-executive chairman. The board of directors will consist of 11 members. Valeant and Biovail will each have five representatives. The sixth member will be an independent Canadian resident director.
The deal is slated to close by the end of the year.
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