Valeant has been buying up companies that fit its needs: cash-earners that mostly target the out-of-pocket segment within the dermatology and ophthalmology markets. Why out-of-pocket? Valeant is like everyone else; it wants to avoid insurance companies.
VRX daily - Jan 2014
Valeant itself was bought in 2010 by Biovail, which chose to assume its new property's name. Since then, its buying spree has been running at about 25 deals per year.
Its latest — and biggest — deal was its $8.7 billion purchase of Bausch & Lomb Holdings . The acquisition was wrapped up in August.
Normally, an acquiring company's stock takes a hit on news it will be shelling out cash. But Valeant soared May 24 and May 28 as news of the then-pending deal made the rounds.
Why? Valeant says the cost synergies will save $800 million — or "significantly more" — each year.
The Bausch & Lomb deal brings to Valeant a portfolio of eye-care products, including prescription medicines and over-the-counter products.
Bausch & Lomb's line not only is profitable, it fits well with Valeant's existing lines, which focus on ophthalmology and dermatology.
VRX monthly - Feb 2014
A $13 billion all-stock bid for Actavis (ACT) was rejected.
Valeant's three most recent quarterly reports showed earnings gains of 30%, 14% and 33%. The last report, Q3, showed $1.34 per share, which beat estimates by 6 cents.
Revenue in those three recent quarters rose 43%, 25% and 34%.
Valeant's 41% pretax margin last year reflects four straight years of improvement. Return on equity, a gauge of financial efficiency, climbed for two years in a row and hit 36.9% in 2012.
But at 283%, Valeant's long-term debt-to-shareholder-equity is heavy.
Maybe the company's newly acquired product line more than pays for the higher debt-service obligations, but what happens if interest rates start to rise? That has to be a concern.
Address
2150 St. Elzear Blvd. West
LAVAL, QC H7L 4A8
Canada
LAVAL, QC H7L 4A8
Canada
Website
http://www.valeant.comKey stats and ratios
Q3 (Sep '13) | 2012 | |
Net profit margin | -63.04% | -3.27% |
Operating margin | -58.35% | 1.68% |
EBITD margin | - | 49.19% |
Return on average assets | -16.25% | -0.75% |
Return on average equity | -73.30% | -3.03% |
Employees | 4,300 |
No comments:
Post a Comment