Valeant, which bought the Irvine, California-based Obagi for about $344 million in 2013, will sell the business to Haitong International Zhonghua Finance Acquisition Fund I LP.
The Obagi Medical Products unit includes skin-care products designed to help minimize the appearance of premature skin aging, skin damage and hyperpigmentation, the company said.
Proceeds from the deal, which is expected to close in the second half, will be used to further repay term loan debt, Valeant said.
U.S.-listed shares of the company reversed course and were up 1.2 percent at $17.45 in pre-market trading. They had gained about 37 percent since June 1.
The drugmaker has been looking to reduce its debt pile of about $29 billion as of March 31, following a furious spate of deal-making under former CEO Mike Pearson.
Valeant said last week it paid down $811 million of debt with proceeds from the sale of its cancer treatment unit Dendreon Pharmaceuticals.
Limited partners of the Haitong fund include industry veterans in other geographic markets, such as China Regenerative Medicine International Ltd.
Morgan Stanley is Valeant’s financial adviser, while Norton Rose Fulbright the legal adviser.