Valeant Pharmaceuticals International has agreed to acquire AB Sanitas, a branded generics specialist from Lithuania.

The US firm is paying some 314 million euros in cash, which includes the assumption of around 50 million euros in Sanitas debt. The major shareholders of the latter have agreed to sell Valeant 87.2% of the outstanding shares of Sanitas and once that is done, a mandatory tender offer to acquire the remaining minority interest will begin.

Based in Kaunas, Sanitas boasts a broad branded generics portfolio consisting of 390 products in nine countries throughout central and eastern Europe, primarily Poland, Russia and Lithuania. Revenues this year are expected to be over 100 million euros.

Valeant chief executive Michael Pearson said the deal provides his firm with "an exciting opportunity to expand our European branded generics product portfolio with dermatology and hospital injectable compounds that have a strong track record of growth and profitability". He added that with "80% of the Sanitas portfolio consisting of non-reimbursed products with limited exposure to government pricing pressures, Valeant will be in a key position to continue our expansion into central and eastern Europe".

It is the company's first deal since a $5.7 billion hostile bid for Cephalon was topped by Teva Pharmaceutical Industries' $6.8 billion offer in February. At the time, Mr Pearson said "we will remain disciplined on our M&A strategy and will look to deploy our freed-up capital on other opportunities".