Valeant Pharma (VRX) to Acquire Obagi Medical (OMPI) for $19.75/Share

March 20, 2013 8:02 AM EDT
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Obagi Medical Products, Inc (NASDAQ: OMPI) entered into a definitive merger agreement with Valeant Pharmaceuticals International, Inc. (NYSE: VRX) under which Valeant will acquire all of the outstanding common stock of Obagi for $19.75 per share in cash. The transaction, which values Obagi common stock at approximately $360 million, was unanimously approved by the Obagi Board of Directors. The $19.75 per share price represents a 42% premium to Obagi’s closing share price on Thursday, March 14, 2013, the last trading day prior to the disclosure of its fourth quarter and full year 2012 earnings, and a 40% premium to the thirty day prior stock price.

Under the terms of the merger agreement, Valeant will commence a tender offer for all of the outstanding shares of common stock of Obagi. The Obagi Board of Directors recommends that Obagi stockholders tender their shares in accordance with the terms of the merger agreement.

Both parties expect the transaction to be completed in the second quarter 2013, subject to customary terms and conditions, including the tender of a majority of Obagi’s outstanding shares of common stock and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The merger agreement provides for the parties to effect a merger following the completion of the tender offer, which will result in all shares of common stock not tendered in the tender offer being converted into the right to receive $19.75 per share in cash.

Morgan Stanley is acting as exclusive financial adviser for Obagi. Jenner & Block LLP is providing legal counsel to Obagi.

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