UPDATE 1-Valeant says to buy Australia's iNova for $623 mln

MELBOURNE Nov 21 (Reuters) - Canada's Valeant Pharmaceuticals International Inc said it agreed to buy Australia's iNova Pharmaceuticals from private equity firms Archer Capital and Ironbridge for A$625 million ($623 million) upfront.

Valeant said the deal includes an additional A$75 million 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$1.3 billion.

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$200 million, 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 Chairman J. Michael Pearson.

He said the deal was expected to be immediately accretive.