“The valuation is pretty high, this is a decent price” Valeant is getting for the skin care brands, said Rudi van Den Eynde, who helps oversee about $1-billion in assets at Candriam Investors Group, including L’Oreal shares.
The acquisition by L'Oréal is part of Valeant's $2.1 billion sale of assets in an effort to reduce debt. Earlier, Valeant agreed to sell its Dendreon Pharmaceuticals unit to Sanpower Group for $820 million. But Valeant still has a long, long way to go if it wants to balance its books. The company is $30 billion in debt and remains tangled in scandals about its drugs’ high prices and accounting that led to legal and regulatory investigations along with declines in its share price.
CeraVe was founded in 2005 and offers a range of advanced skin care products, specifically cleansers, moisturizers, sunscreens, healing ointments and a dedicated baby line. Developed with dermatologists, CeraVe is one of the fastest growing skincare brands in the U.S. with average growth over the past two years exceeding 20%, according to L'Oréal. CeraVe's multi-channel distribution strategy includes drug stores, mass and beauty retailers, and select online outlets.
AcneFree markets and distributes a full range of OTC cleansers and acne treatments in the U.S., Ambi distributes skincare products formulated for the needs of multicultural consumers. Both brands are distributed in drug stores, mass retailers and select online outlets.
The L'Oréal acquistion is expected to close in the first quarter. The Sanpower deal should be completed during the first half of the year.