French cosmetics giant L'Oreal said Tuesday it had agreed to buy three leading skincare brands from Valeant for $1.3 billion in a move set to give its US offering a facelift.
The cash deal will see L'Oreal acquiring the CeraVe, AcneFree and Ambi brands from the Quebec-based pharmaceutical firm in a purchase it said would nearly double the US sales of its active cosmetics division which focuses on aesthetic dermatology.
"The acquisition of CeraVe, AcneFree and Ambi strongly complement L'Oreal's brand portfolio," said Frederic Roze, president and chief executive of L'Oreal USA in a statement.
"These three brands, built on strong relationships with health professionals and widely distributed, will nearly double the revenue of our Active Cosmetics Division in the US and will help us satisfy the growing demand for active skincare at accessible prices."
Founded in 2005, CeraVe offers a range of skincare products including cleansers, moisturisers and sunscreens as well as a baby line. It is one of the fastest growing skincare brands in the US with an average growth over the past two years of over 20 percent, L'Oreal said.
AcneFree provides acne treatments and Ambi offers products for multicultural consumers.
The deal comes after a difficult year for the Canadian drugmaker, which grew from a small pharmaceutical company to a global giant in the span of a decade mainly due to a growth strategy based on acquisitions.
But the former Wall Street darling has come under fire for steep price hikes on drugs and is currently under investigation in the US over alleged accounts manipulation, with former senior executives being probed for fraud.
The embattled firm is also struggling to offload a heavy burden of long-term debt, which stood at just over $30 billion at the end of the third quarter, with Valeant saying the sale would help it "permanently repay term loan debt".
The move comes a day after the drugmaker said it had agreed to sell its Dendreon cancer business to Chinese conglomerate Sanpower for $820 million.
