Endo Health To Buy Paladin Labs, Post Lower Q3 Profit

(RTTNews) - U.S. based specialty healthcare company, Endo Health Solutions (ENDP) Tuesday said it would buy Canada-based specialty pharmaceutical company Paladin Labs Inc. (PLDLF.OB, PLB.TO) in a stock and cash transaction valued at about $1.6 billion, of which 98 precent will be paid in shares of stock. The deal is expected to be immediately accretive to Endo's 2014 adjusted earnings per share. As a result, each of Endo and Paladin Labs will be acquired by a newly-formed Irish holding company, "New Endo".

Additionally, shareholders of Paladin Labs will also receive one share of Knight Therapeutics Inc, which will hold Impavido, Paladin Labs' product for the treatment of leishmaniasis.The deal would boost Endo's strategic transformation to a specialty healthcare company and would create a platform for growth in North America and globally. Post completion of the deal, New

Endo will be led by Endo's current management team, while Paladin Labs will be a separate operating company under New Endo. Operational and tax synergies are expected to total at least $75 million of after tax savings on an annual basis. Endo expects the deal to close by 2014.

Separately, Endo Health Solutions reported a decrease in net income for third-quarter, including a charge of $31 million, primarily to reflect the impact of an accrual for certain product liability claims and asset impairment charges related to ongoing strategic alternatives for the HealthTronics business of about $38 million.

The company reported net income of $40.2 million or $0.33 per share, compared with $53.8 million or $0.45 per share last year. On an adjusted basis, earnings were $1.34 per share. On average, nineteen analysts polled by Thomson Reuters expected the company to report earnings per share of $1.11 for the quarter. Analysts' estimates typically exclude one-time items.

Revenues decreased 5 percent to $715 million, from prior year's $750.4 million. Analysts expected the company to generate revenue of $695.63 million.

Looking forward, the company said it raised its full-year 2013 revenues to a range of $2.75 billion to $2.80 billion, and earnings per share to a range of $4.60 to $4.75. The company lowered reported earnings per share guidance to a range of $0.95 to $1.10. Analysts expect the company to generate revenue of $2.80 billion, and earnings of $4.56 per share.