The Quebec-based company said it has a definite agreement to buy Amoun Pharmaceutical from Mercury (Cayman) Holdings.
The deal includes Amoun's manufacturing plant, which would add to Valeant's 40 manufacturing plants around the world.
Egypt's pharmaceutical industry has grown from under US$5 billion to US$21 billion in a decade, said analyst Douglas Miehm of RBC Capital Markets, who characterized the deal as "slightly positive" for Valeant.
He said the acquisition isn't a surprise given recent media reports about the possibility of such a deal and follows CEO Michael Pearson's interest to expand into emerging markets in Asia and the Middle East.
Valeant (TSX:VRX) said emerging markets are expected to account for about 20 per cent of its revenues in 2015, including 10 per cent from Eastern Europe, Africa and the Middle East.
Miehm said Amoun's contribution to Valeant's results will grow over the next three years. He estimates it should generate one to two per cent earnings growth, or 15 to 30 cents per share.
Amoun has sales expected to reach about US$223 million this year. It has more than 30 branded products, including those for animal health and the treatment of hypertension, infections and diarrhea.
If the transaction closes as planned in the third quarter, it will be Valeant's biggest acquisition since it paid US$11.1 billion to buy Salix Pharmaceuticals. That deal closed April 1 after a bidding war with Irish rival Endo International.
Valeant is one of Canada's largest companies by market capitalization. The company is expected to report next week a more than tripling of net profits to US$426.2 million in the second quarter on a 25 per cent increase in revenues to US$2.5 billion, according to analysts polled by Thomson Reuters. Adjusted profits excluding one-time items are forecast to reach US$863.3 million or US$2.46 per share.
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