Endo To Buy Par Pharma In $8.05 Bln Cash, Stock Deal

(RTTNews) - Endo International Plc. (ENDP) and Par Pharmaceutical Holdings, Inc. said they have entered into a definitive agreement for Endo to acquire privately held Par from TPG in a transaction valued at $8.05 billion, including assumption of Par's debt.

The purchase price will consist of 18 million shares of Endo equity and $6.50 billion cash consideration to Par shareholders. The shares are valued $1.55 billion based on the 10-day volume weighted average share price of Endo ending on May 15.

The transaction, estimated to close in the second half of 2015, is expected to add to earnings per share within the first 12 months after the close of the deal. It is expected to result in double-digit accretion to adjusted earnings per share in full year 2016.

For 2016, Endo anticipates that Earnings Before Interest, Tax, Depreciation and Amortization or EBITDA generated by Par will translate into a transaction multiple of 10 to 11 times pro forma adjusted EBITDA on a post-synergized basis.

Par was acquired through a take-private transaction by an affiliate of TPG in 2012. Its portfolio includes nearly 100 products in multiple dosage forms and delivery systems, including oral solids, oral suspensions, injectables and high barrier-to-entry products. It also has a solid pipeline consisting of over 200 Abbreviated New Drug Applications, 115 of which were filed with the U.S. Food and Drug Administration as of December 31, 2014.

The combination is expected to create a leading specialty pharmaceutical company with a fast-growing generics business that is among the top five as measured by U.S. sales. The combined company is also expected to help drive long-term double-digit revenue growth for Endo.

Par CEO Paul Campanelli will join Endo to lead generics business and will join the Executive Leadership Team.

Endo estimates the transaction to generate $175 million in operational and tax synergies, which are expected to be realized within the first 12 months after the completion of the transaction.

The transaction has been unanimously approved by the Boards of Directors of Endo and Par, and is supported by the management teams of both companies. No further shareholder approvals are required.

Endo has secured fully committed financing from Deutsche Bank and Barclays to fund the cash consideration. The company expects to implement a permanent capital structure to finance the transaction before the close that would include a combination of cash, debt and an equity offering.

Rajiv De Silva, President and CEO of Endo, said, "Our generics business, Qualitest, continues to be an extremely attractive and effective growth driver for Endo. This transaction with Par builds upon our generics growth, adding a strong portfolio of high barrier-to-entry and attractive gross margin products while also transforming Endo, creating a powerful corporate platform for future growth and strategic M&A."

ENDO closed up 0.4 percent on Friday at $85.35, and climbed 4.3 percent in pre-market activity.