Valeant outbids Merz for Obagi

After Valeant Pharmaceuticals made a push to buy Obagi Medical Products for about $344 million in late March, Merz Pharma Group stepped up with an offer of about $384 million, but has since dropped its bid for the aesthetic skincare manufacturer, according to reports.

Valeant responded to Merz’s offer with one of $24 per share, or about $418 million, forcing Merz to back away from its non-binding proposal.

“Obagi was an opportunity worth pursuing given its complementary fit with Merz’s portfolio of injectables,” Merz CEO Philip Burchard said in a news release. “However, Merz is a disciplined buyer and at this level the economics of such a transaction do not meet our requirements. We look forward to exploring other acquisition opportunities that fit our strategy.”

Obagi’s product lineup includes Nu-Derm, ELASTIDerm and CLENZIDerm. It collected $120 million in revenues in 2012. The transaction with Valeant, which also acquired Medicis Pharmaceuticals for $2.6 billion last year, was unanimously approved by Obagi’s board of directors.