Cross-border team advises Valeant on sale of Obagi Medical Products business

A Norton Rose Fulbright life sciences and healthcare team recently advised client Valeant Pharmaceuticals International, Inc. on an agreement to sell its Obagi Medical Products business for US$190 million in cash to Haitong International Zhonghua Finance Acquisition Fund I, L.P.

"The sale of Obagi marks additional progress in our efforts to streamline our operations and reduce debt," Joseph C. Papa, chairman and CEO, Valeant. "As we continue to transform Valeant, we will remain focused on the core businesses that will drive high value for our shareholders."

Obagi Medical Products is a global specialty pharmaceutical company founded by leading skin care experts in 1988. Obagi products are designed to help minimize the appearance of premature skin aging, skin damage, hyperpigmentation, acne and sun damage and are primarily available through dermatologists, plastic surgeons, medical spas and other skin care professionals.

Valeant will use proceeds from the sale to permanently repay term loan debt under its Senior Secured Credit Facility. The transaction is expected to close in the second half of 2017, subject to customary closing conditions, including receipt of applicable regulatory approvals.

The Company currently estimates that the full-year 2017 revenue and Adjusted EBITDA (non-GAAP) for the Obagi business would have been approximately US$85 million and US$30 million, respectively.

The team was led by partner Andres Liivak (New York) with assistance from lead associates Chaula Mehta and Blake Walsh (Washington, DC), all on the healthcare transactions team. Other US team members included partners Robin Adelstein (New York) who advised on antitrust issues; Laura Kalesnik (Dallas) who advised on corporate issues; Neely Agin (Washington, DC) who advised on issues relating to the Hart Scott Rodino Act; Cori Goldberg (New York) who advised on FDA regulatory issues; Michael Flamenbaum (New York) who advised on tax issues; Gina Shishima and Mike Stimson (Austin) who advised on intellectual property issues; Alex Clark (Dallas) who advised on employee benefits issues; and associates Luke McFarland (Washington, DC) who also assisted on Hart Scott Rodino Act issues; Will Betts and Michelle Peach (Dallas), who provided general transactional support. Internationally, partners William Hlibchuk (Montreal) advised on employment issues and Doris Ng, Harold Tin and David Milligan (Hong Kong) advised on corporate issues.