J.P. Morgan Reiterates Overweight Rating on Valeant Pharmaceuticals International on Obagi Acquisition

In a report published Wednesday, J.P. Morgan analyst Chris Schott reiterated an Overweight rating on Valeant Pharmaceuticals International

. In the report, Schott noted, “This morning, Valeant announced the acquisition of Obagi Medical for $360 mm. While incrementally small relative to Valeant's overall $4.7 bn in sales and $2 bn promoted products business, we believe the deal makes strategic sense for Valeant given the company's presence in the derm space, the company's affinity for consumer assets and the long duration of the Obagi portfolio. Our initial EPS accretion estimates are around $0.10 on an annualized basis ($0.15 assuming no debt financing), but we await further detail from Valeant with its 1Q/13 earnings report. We remain OW VRX shares.” Valeant Pharmaceuticals International closed on Tuesday at $71.44.