L'Oreal to pay $1.3B for Valeant skin-care brands

PARIS-- L'Oréal SA plans to buy CeraVe and two other skin-care brands (AcneFree and Ambi) from Valeant Pharmaceuticals Inc. for $1.3 billion, expanding the French cosmetics firm's U.S. presence and deepening its portfolio in a product segment that has become the beauty industry's largest.

• Earlier in the day, Valeant said it would sell its Dendreon Pharmaceuticals unit to closely held Chinese conglomerate Sanpower Group Co. for about $820 million.
• The agreements mark a start to Valeant's efforts to pay down about $30 billion in debt. The Laval, Quebec-based company has been embroiled in scandals about its drugs' high prices and accounting that led to legal and regulatory investigations along with declines in its share price. 
• The three brands have combined annual sales of about $168 million and will become part of L'Oreal's Active Cosmetics Division, alongside La Roche-Posay, Vichy and SkinCeuticals.
• Through Monday, 9 Jan 2017, Valeant's U.S. shares had plunged 94 percent from their 2015 peak, cutting the company's market value to $5.2 billion.

The all-cash deal will give L'Oréal the CeraVe brand, which includes cleansers, moisturizers and healing ointments, as well as the AcneFree and Ambi brands, which distribute a range of acne treatments and skin-care products.

L'Oréal, one of the world's leading cosmetics makers, said the three brands have an annualized combined revenue of around $168 million.

CeraVe offers a range of skin-care products including cleansers, moisturizers and sunscreens, as well as a baby line. It is one of the fastest-growing skin-care brands in the U.S., averaging 20% annual growth over the past two years, L'Oréal said.

L'Oréal said the three brands would stand alongside the likes of Vichy, La Roche-Posay and SkinCeuticals in its Active Cosmetics division, which has been growing in recent quarters, boosted by strong performances in North America and Latin America.

For Valeant, the sale is part of new Valeant Chief Executive Joseph Papa's efforts to focus the company on its key franchises by selling noncore assets or milking them for cash to pay down $30 billion in debt.