Valeant Pharmaceuticals International Inc.'s sale of iNova Pharmaceutical for $930 million in cash appears to be debt neutral, Evercore analyst Umer Raffat wrote in a note. Valeant said it plans to use the proceeds of the deal to pay down loan debt. The company is under pressure to reduce a debt burden that stood at $26.5 billion at the end of the first quarter after a series of asset sales and adjustments to loan terms. Raffat said iNova was sold at 7.4 times EBITDA, based on the company's $125 million in EBITDA for 2017. The company's net debt to EBITDA ratio currently stands at 7.4 times to 7.7 times. "The transaction simplifies the geographic footprint a bit for Valeant ... but as I mentioned, its debt neutral (i.e., not de-levering)," Raffat wrote.The iNova business was acquired in late 2011 for $657 million and was generating about $200 million in revenue a year as of disclosures made in 2012. Valeant shares pared their initial premarket gains of about 5% and were last up 3.5%. The stock has fallen 16% in 2017, while the S&P 500 has gained about 9%.
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