Melbourne - Canada's Valeant Pharmaceuticals International said it agreed to buy Australia's iNova Pharmaceuticals from private equity firms Archer Capital and Ironbridge for A$625m upfront.
Valeant said the deal includes an additional A$75m in potential milestone payments based on the success of pipeline activities.
The deal is the latest in a string of sales by private equity firms in Australia in recent months as they exit investments made in the boom years. Archer sold its MYOB software business in August for A$1.3bn.
iNova, which sells prescription and over-the-counter drugs in Australia, New Zealand, Southeast Asia and South Africa, will have total 2011 revenues of about A$200m, Valeant said.
"This transaction not only transforms our operations in the Australian market, but provides us with a beachhead in both Southeast Asia and South Africa," said Valeant chairperson J Michael Pearson.
He said the deal is expected to be immediately accretive.