On Monday morning, Valeant Pharmaceuticals announced that it has increased its bid for Salix Pharmaceuticals. Here’s what the deal means for mutual fund investors.
Inside the Deal
Canada-based Valeant Pharmaceuticals adjusted its deal to acquire Salix Pharmaceuticals to $173 per share, or $11.1 billion. Including debt, the deal is valued at $15.8 billion.
In the previous deal, Valeant offered to acquire the company for $158 per share, or $14.5 billion. The offer was increased after Endo International (ENDP) expressed interest in acquiring Salix for $175 per share, or $11 billion.
The adjusted deal has been approved by the Boards of Directors of both companies.
Valeant And It’s M&A Strategy
This transaction will be one of many for Valeant. The pharmaceutical giant has made over 100 transactions since 2008, including joint ventures. M&A is a common strategy among many drug companies, as many struggle to grow organically without acquisitions.
Last year, Valeant’s deal to acquire Allergan (AGN) fell through, and since then, VRX has been seeking alternative deals.
Mutual Funds to Watch
Investors interested in VRX and may also consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in VRX.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| SEQUX | Sequoia | 3.36% |
| PRGFX | T. Rowe Price Growth Stock | 1.33% |
| SEEGX | JPMorgan Large Cap Growth Select | 0.68% |
The Bottom Line
The funds above are a great way for investors to gain exposure to a diverse bundle of securities and industries. Investors interested in VRX may also be interested in Allergan (AGN) and GlaxoSmithKline (GSK).
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