Ackman Owned Sprout Stake Before Ally Valeant Bought Drugmaker

Bill Ackman
Investor Bill Ackman. Photographer: Jin Lee/Bloomberg

Investor Bill Ackman, who allied himself with Valeant Pharmaceuticals International Inc. in a drug-industry takeover battle last year, held a small stake in the company Valeant agreed to acquire this week, according to a person familiar with the matter.

Ackman acquired less than 1.5 percent of Sprout Pharmaceuticals Inc. in its most recent round of funding, said the person, who asked not to be identified discussing a private matter.

That was before Sprout won approval Tuesday by U.S. regulators for its pink libido-boosting pill for women. Valeant announced Thursday that it will buy Sprout for $1 billion, plus unspecified future payments. Ackman’s stake was reported earlier by the Wall Street Journal. He wasn’t involved in Sprout’s sale process, the person said.

Ackman’s Pershing Square Capital Management LP worked last year on a campaign to push Allergan Inc. to sell itself to Valeant. Allergan eventually agreed to be bought instead by Actavis Plc. Pershing Square still owns a 5.7 percent stake in Valeant.

When Ackman invested in Sprout, the company was valued at around $500 million, the person familiar with the matter said. The purchase was personal for Ackman, as Pershing only invests in public companies.

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