UPDATE: Cantor Fitzgerald Downgrades Obagi Medical Products to Hold on Merger News

Cantor Fitzgerald analyst published a report on Obagi Medical Products (NASDAQ OMPI) that lowered its rating from Buy to Hold and raised its price target from $19.00 to $19.75. Cantor Fitzgerald reported that, "On March 20, Valeant announced that it had entered an agreement to purchase Obagi for $360 million, or $19.75/share, a 28% premium to the prior day's closing price. Valeant indicated that it could realize up to $40 million in synergies, which we think could reasonably come from SG&A cuts. The offer values the company at approximately 3.75x discounted 2013E sales, which is generally in line with other historical deals in the dermatology space such as Medicis and Fougera (but is lower than what Allergan paid for SkinMedica, in our view). After speaking with management we believe that the deal has been shopped around and we are not expecting any competing bids.” Shares of Obagi Medical Products closed at $19.73 on Wednesday.