UPDATE: Deutsche Bank Increases PT on Valeant on Obagi Medical Acquisition

In a report published Wednesday by Deutsche Bank, analyst David Steinberg maintained a Buy rating on Valeant Pharmaceuticals VRX and lifted the price target from $77 to $83. Steinberg wrote, "Yesterday's definitive agreement to acquire dermatology focused Obagi Medical Products (OMPI) in a tender offer for approximately $350M ($19.75/share) represented a 28% premium to Obagi's closing share price on March 19 or just under 3x sales – somewhat below the average paid for dermatology/aesthetic assets of 3.8x in the past five years. Valeant expects this transaction to close in 1H13 and be immediately accretive to “cash” earnings. As indicated in yesterday's note (“Obagi Acquisition Enhances Valeant's Leading Derm Franchise”), we see this as an excellent fit for Valeant's leading dermatology business and further bolsters Valeant's growing aesthetics business post last year's Medicis acquisition." Valeant closed Wednesday at $73.33