UPDATE: Paradigm Capital Raises PT on Valeant Pharmaceuticals on Company Acquisition

Paradigm Capital analyst Alan Ridgeway published a report on Paradigm Capital

that maintained its Buy rating and raised the price target from $83 to $35. Paradigm Capital reported that, “We believe this is a positive acquisition for Valeant, demonstrating that its strategy remains viable as it continues to find complementary opportunities at fair prices. With this deal, Valeant is acquiring a dermatology business that should easily plug-and-play into its own infrastructure. Given the potential synergies from this integration, VRX appears to be paying a multiple of 4.0–4.9x, including synergies, which is at the low end of the 4.0–6.0x that we expect for acquisitions. At this price, we believe the deal is attractive based on the accretion it provides, as $0.20 of additional cash EPS represents ~$600M in additional market cap at current market multiples and ~$760M in value at our price target multiple. As a result, we believe management has found another good fit for the company at an attractive price and we expect it to finalize additional deals before year-end.” Shares of Valeant Pharmaceuticals closed $73.33 on Wednesday.