By Dana Mattioli and William Horobin
Valeant Pharmaceuticals Inc. agreed to sell three skin care brands including CeraVe to French cosmetics giant L'Oréal for $1.3 billion, the latest effort by the beleaguered drugmaker to unload assets and pare debt.
The sale of the brands to L'Oréal follows swiftly on Valeant's agreement on Monday to sell its Dendreon cancer business to Chinese conglomerate Sanpower for $820 million.
The asset sales are part of new Valeant Chief Executive Joseph Papa'sefforts to focus the company on its key franchises in skin drugs, stomach treatments, eye care and consumer health, while either selling noncore assets or milking them for cash to pay down $30 billion in debt.
Valeant has put a number of assets on the auction block, but has struggled to strike sale agreements at acceptable prices. Most notably, it came close but ultimately failed to seal a deal to sell stomach-drug maker Salix Pharmaceuticals Ltd. to Japan's Takeda Pharmaceutical Co. for $10 billion.
"We are pleased to announce the progress we are making in reshaping our product portfolio and driving value for our shareholders," said Mr. Papa in a statement on Tuesday.
The completion of both deals is dependent on regulatory approval and other conditions. Valeant said it expects the transaction with L'Oréal to close in the current quarter.
The CeraVe brand includes cleansers, moisturizers and healing ointments. The other brands--AcneFree and Ambi--distributes a range of acne treatments. L'Oréal, one of the world's leading cosmetics suppliers, said the three brands have an annualized combined revenue of around $168 million.
Dendreon, acquired by Valeant under former Chief Executive Michael Pearson, is known for prostate-cancer treatment Provenge. Valeant bought the business for about $500 million in a bankruptcy auction in 2015. The acquisition was Valeant's first big transaction after losing a hostile bid in 2014 for Botox maker Allergan, which went instead to Actavis PLC for about $67 billion.
Valeant wasn't a big player in cancer, and Provenge proved a disappointing fit. Provenge had $300 million in sales the year before the acquisition; it isn't clear what revenue has been more recently.
The company's acquisition spree came to a halt when an accounting scandal engulfed it in late 2015. That has helped pummel the Canadian drugmaker's shares, which topped out at over $250 in 2015 and closed Monday at $15.35, giving Valeant a market value of just over $5 billion.
Sanpower is a sprawling group with a range of holdings. It teamed up in 2014 to buy Brookstone Holdings Corp., known for selling massage chairs, travel gadgets and other novelties, for more than $100 million at a bankruptcy auction. Sanpower, which owns one of China's oldest department stores, had been on an international acquisition spree, also agreeing to buy House of Fraser, a 165-year-old department-store chain, in a deal that valued the U.K. company at $745 million.
--Jonathan D. Rockoff and David Benoit contributed to this article.
Write to Dana Mattioli at email@example.com and William Horobin at William.Horobin@wsj.com
(END) Dow Jones Newswires
January 10, 2017 04:15 ET (09:15 GMT)
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