Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Valeant Pharmaceuticals International — Merger or Acquisition (June 2014)
21 slides from Bausch Health Companies's merger presentation, Jun 3, 2014
Slide 1: Filing under Rule 425 under the Securities Act of 1933
Filing under Rule 425 under the Securities Act of 1933 and deemed filed under Rule 14a-12 of the Securities Exchange Act of 1934 Filed by: Pershing Square Capital Management, L.P. Subject Company: Valeant Pharmaceuticals International, Inc. SEC File No. of Valeant Pharmaceuticals International, Inc.
Slide 2: Additional Information
ADDITIONAL INFORMATION This communication does not constitute an offer to buy or solicitation of an offer to sell any securities and no tender or exchange offer for the shares of Allergan has commenced at this time. This communication relates to a proposal which Valeant has made for a business combi
Slide 3: Disclaimer and Non-GAAP Financial Measures
By presenting this information, none of Pershing Square or its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors, is providing investment, legal, tax, financial, accounting or other advice to you or to any other party. None of Persh
Slide 4: Forward-looking statements
• the effects of the business combination of Valeant and Allergan, including the combined company’s future financial condition, operating results, strategy and plans; • the effects of governmental regulation on Valeant’s and Allergan’s business or potential business combination transaction; • abilit
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Slide 6: Background of the Transaction
Background of the Transaction In September 2013, we hired Bill Doyle as a Consultant Massachusetts Institute of Technology; SB Engineering, 1984 Harvard Business School; MBA, 1992 McKinsey & Company; 1992-1995 Johnson & Johnson; 1995-2000 WFD Ventures LLC; 2002-present In February 2014, Bill Doyle i
Slide 7: Allergan
Allergan ~$50bn market cap specialty pharmaceutical company Leader in aesthetics, dermatology, and ophthalmology Pershing Square forms JV with Valeant to assist in Allergan merger Between February 25th and April 21st, Pershing Square acquired 9.7% of Allergan at an average cost of $128/share represe
Slide 8: Pershing Square Due Diligence on Valeant
Pershing Square Due Diligence on Valeant Reviewed public company information for Valeant On February 9 th, 2014 we executed a confidentiality agreement with Valeant, which allowed us to conduct substantial due diligence In-person meeting with board of directors Extensive management interviews Select
Slide 9: Why We Like Valeant
Why We Like Valeant Durable Products and Growth Shareholder-Friendly Cash Flows Capital Allocation Low % of products High-growth Lower-risk, higher- with patent cliffs categories return R&D Low product High-growth Platform for concentration risk geographies accretive Lower price and New products acq
Slide 10: Valeant's Acquisitions Have Created Value
Valeant's Acquisitions Have Created Value Valeant has a track record of allocating the majority of free cash flow to value-creating acquisitions Conservatively underwrite attractive returns Target 20% unlevered IRR, before tax synergies (est. 30% after-tax) Target < 6-year payback Assign no value to
Slide 11: Valeant's History of Shareholder Value Creation
Valeant’s History of Shareholder Value Creation An investment in Valeant shares on the day Mike Pearson became CEO has appreciated to 26x its initial value in six years including dividend reinvestment Valeant total shareholder return from 2/1/2008 to 5/30/2014 4/22/14: Announced initialofferto 5/27/
Slide 12: Structure of the Transaction
Structure of the Transaction Pershing Square and Valeant formed a co-bidder entity The co-bidder entity was formed with the intent to Make an investment in Allergan Assist Valeant in consummating a merger between Valeant and Allergan Valeant invested the HSR limit of $75.9mm and Pershing Square cont
Slide 13: Allergan Investment Thesis
Allergan Investment Thesis Strategic rationale of a Valeant/Allergan merger Allergan has a strong track record of organic growth driven by a portfolio of market leading products, including the fast-growing Botox franchise Allergan has a poor track record of capital allocation and cost management Giv
Slide 14: Allergan: Timeline of Events
Allergan: Timeline of Events Stockpriceperformance ofAGNfrom2/25/2014 to5/30/2014 5/12/14: AGN Board 4/22/14: Valeant rejects initial VRX offer announces offer to $167 acquire AGN for 0.83 VRX shares and $48.30 per share in cash 5/28/14: VRX raises 2/25/14: Pershing offer to include Square begins 4/
Slide 15: May 30th Revised Offer
May 30 th Revised Offer On May 30 th Valeant Revised Its Offer to Allergan Shareholders Increased cash from $58.30 to $72 per share of Allergan Allergan shareholders will also receive 0.83 shares of Valeant for each share of Allergan Pershing Square’s All-Stock Election On May 30 th, conditioned on
Slide 16: Pershing Square's All-Stock Election Improves Terms of the Transaction for Others
Pershing Square’s All-Stock Election Improves Terms of the Transaction for Others Pershing Square’s stock election increases cash available for other shareholders by $6.65 per share Valeant has agreed to distribute $20bn of cash consideration to Allergan shareholders As an owner of 9.5% (1) of Aller
Slide 17: Why Pershing Square Agreed To Elect All Stock
Why Pershing Square Agreed To Elect All Stock All-stock election creates greater value for non-Pershing Allergan shareholders $587mm of immediate value contribution $1.8bn ($6.65 per share) increase in cash available to other shareholders Likely increases probability of transaction consummation and
Slide 18: Pershing Square's Stock Election Demonstrates Confidence in the Transaction
Pershing Square’s Stock Election Demonstrates Confidence in the Transaction Valued at Valeant’s May 30 th closing price, Pershing Square’s all stock election is worth $19.96 per share less than the cash and stock proposal offered to other Allergan shareholders Equity Consideration Calculation Cash +
Slide 19: By Electing All-Stock, Pershing Square is Better Off if Valeant is >$180
By Electing All-Stock, Pershing Square is Better Off if Valeant is >$180 at the Time of Closing If Valeant’s stock price is >$180 at the close of the transaction, Pershing Square’s all-stock election will be more valuable than the cash and stock proposal offered to other shareholders Equity Consider
Slide 20: Favorable Risk/Reward At Current Allergan Prices
Favorable Risk/Reward At Current Allergan Prices The Valeant transaction offers substantial upside At $182(1) per Valeant share, the Pershing Square all-stock election is worth $222 per Allergan share, or 33% more than the current Allergan stock price The “White Knight” possibility While we believe
Slide 21: Pershing Square Launched the Special Meeting Solicitation Process
Yesterday, June 2, 2014, Pershing Square Launched the Special Meeting Solicitation Process June 2 nd: Preliminary proxy filed with SEC June 12 th – June 22 nd: SEC comment period (10 – 20 days) June 14 th – June 24 th: Proxy materials printed (2 days) June 16 th – June 26 th: Proxy materials mailed
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