Valeant Pharmaceuticals International, Inc., a multinational specialty pharmaceutical company, announced that its affiliate has entered into a definitive agreement under which Valeant will acquire Synergetics USA, Inc, a leading supplier of precision surgical devices, for $6.50 per share in cash.

In addition to the upfront cash payment, Synergetics stockholders will receive additional cash payments of up to $1.00 per share if specified sales milestones are achieved following the closing. The transaction is expected to close in the fourth quarter of 2015 and is subject to customary closing conditions and regulatory approvals.

"The addition of Synergetics' portfolio of instruments and devices will further enhance Bausch + Lomb's presence around the world in the rapidly evolving field of vitreoretinal surgery," stated J. Michael Pearson, chairman and chief executive officer of Valeant.  

"We are committed to delivering a valuable and broad array of surgical devices and instruments to serve the needs of the surgical retina community and their patients."

"We are pleased to reach an agreement with Valeant, which is a logical partner to maximise our company's growth opportunities and, importantly, this agreement creates immediate and compelling value for our shareholders," said David M. Hable, president and chief executive officer of Synergetics.

"The combined strengths of both companies will expand the breadth of our offerings and create a more effective competitor that is better able to meet our customers' needs in the ophthalmology and neurosurgery markets."

Under the terms of the agreement, Valeant will promptly commence a tender offer to acquire all outstanding shares of Synergetics' common stock for $6.50 per share in cash plus one contingent value right entitling the stockholder to receive up to $1.00 per share if specified sales thresholds for Synergetics are achieved following the closing.

The details of the contingent cash consideration payments include $0.50 per share in cash payable upon sales of the company's ophthalmology products achieving $55 million on a trailing four calendar quarter basis prior to June 30, 2018; and $0.50 per share in cash payable upon sales of the company's ophthalmology products achieving $65 million on a trailing four calendar quarter basis prior to June 30, 2018, with a pro-rata portion payable for net sales above $55 million but less than $65 million.

The consummation of the tender offer is subject to various conditions, including a minimum tender of a majority of outstanding Synergetics' shares on a fully-diluted basis, the expiration or termination of any applicable waiting periods under applicable competition laws, and other customary conditions. The Board of Directors of Synergetics unanimously approved the transaction.

William Blair & Company, L.L.C. acted as the financial advisor to Synergetics, and Armstrong Teasdale LLP acted as legal advisor to Synergetics.  Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Valeant.