Deals
Valeant Debt-Loaded Deal Binge Casts Doubt on Strategy: Real M&A
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Valeant Pharmaceuticals International Inc.’s deal-fueled quest to become a $150 billion company has some investors doubting the strategy as it loads up on debt.
The world’s most acquisitive drugmaker loses money on a pre-tax basis, and its dealmaking frenzy left it paying triple in interest what the business earned in operating profit last year. The stock is slumping from a February peak as Valeant goes after its biggest target yet: Allergan Inc., whose $50 billion market value now dwarfs Valeant’s $45 billion. The company is saddled with the highest leverage ratio in its peer group, according to data compiled by Bloomberg. That’s before it borrows an additional $15 billion to buy Allergan.