Debt-saddled Canadian drugmaker Valeant Pharmaceuticals (NYSE/TSX: VRX) has agreed to sell three of its skincare brands to French cosmetics company L’Oreal (EPA: OR) for $1.3 billion in cash. In a separate deal worth $819.9 million, Valeant earlier this week agreed to sell its urological oncology unit Dendreon Pharmaceuticals to Chinese conglomerate Sanpower Group. Following the divestments, the embattled company saw its shares pop, closing Tuesday up 6.8% at $16.40.
Selling CeraVe, AcneFree and AMBI to L’Oreal has helped Valeant realize a 7.7x multiple on their combined annual revenues—approximately $168 million. For L’Oreal’s part, the purchase represents a play for the growing market for medicated skincare products housed under the company’s active cosmetics division, which also includes the brands La Roche-Posay, Vichy and SkinCeuticals.