Valeant Pharmaceuticals has announced its latest asset sell-off as of Monday morning, another step in its efforts to streamline its business and reduce debt.
Valeant Pharmaceuticals International Inc.is taking a big price cut on Obagi Medical Products, selling the antiaging skin-care company to an Asian fund for $190 million.
Founded in 1988, Obagi Medical Products are created to address premature skin aging and skin damage.
But hard times - including a scandal related to its mail-order pharmacy, prominent shareholders abandoning their investments, astronomical levels of debt and a falling stock price - hit the company, forcing it to reevaluate its business model.
The insurgent fund had been preparing to nominate a slate of dissident director candidates in 2013 to Obagi's board, in a move that came shortly before the company agreed to sell itself to Valeant. VRX continues to make progress toward its asset sales and total debt reduction targets, although, in our opinion, leverage remains high and we do not believe that recent deals, including divestitures of iNova, Dendreon, and Obagi, have had a significant deleveraging impact. The Obagi acquisition added to its already strong portfolio of specialty dermatology products.
The company made a promise previous year to reduce debt by $5 billion within 18 months of August 2016. Most recently, Valeant said it has paid down $4.8 billion since the first quarter of 2016.