Valeant will pay $6.50 for Synergetics outstanding shares in a deal that represents a 48% premium over the company's closing price on Tuesday.
The acquisition, which is expected to close in the fourth quarter, has a total value of about $166 million.
Valeant also said that Synergetics shareholders will receive additional cash payments of up to $1 per share if the company reaches certain sales milestones after the deal is completed.
"We are pleased to reach an agreement with Valeant, which is a logical partner to maximize our company's growth opportunities and, importantly, this agreement creates immediate and compelling value for our shareholders," said Synergetics CEO David Hable.
TheStreet Ratings team rates SYNERGETICS USA INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SYNERGETICS USA INC (SURG) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."