Endo to Acquire Par Pharmaceutical for $8 Billion

In an effort to boost its generics business, Endo International PLC has agreed to buy Par Pharmaceutical Holdings Inc. for more than $8 billion.

The company said that it has entered into a definitive agreement under which it will acquire privately-held Par from TPG in a transaction valued at $8.05 billion, including assumption of Par debt. The company said that the transaction creates a specialty pharmaceutical company with one of the industry’s fastest growing generics businesses and expanded product portfolio, pipeline, technology platform and manufacturing capabilities.

According to Endo, the deal will move the company into the top five among all US generic drug manufacturers based on sales.

Endo will pay $6.5 billion in cash and 18 million Endo shares, worth about $1.55 billion as of Friday, May 15. Additionally, the price includes assuming Par’s debt. The transaction has been unanimously approved by both companies’ Board of Directors and does not require any additional shareholder approvals. The deal is expected to close in the second half of 2015.

“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 grow margin products while also transforming Endo, creating a powerful corporate platform for future growth and strategic M&A,” said Rajiv De Silva, President and CEO of Endo. “We believe the acquisition of Par underscores the continued execution of Endo’s value-driven M&A strategy and helps deliver on our goal of achieving double-digit revenue growth for the overall business over the long-term.”

TPG bough Par for roughly $1.8 billion in 2012. Par’s current pipeline consists of more than 200 Abbreviated New Drug Applications (ANDAs), 115 of which were filed with the US Food and Drug Administration (FDA) in December. The companies hope to generate $175 million in operational and tax savings within the first 12 months after the transaction closes.

“This is an exciting time of growth and opportunity in the generics and specialty pharmaceutical arenas. Par Pharmaceutical is committed to significantly expanding our scope, capacity and capabilities to realize the maximum value of our rich and diversified product portfolio and R&D pipeline. We believe our combination with Endo best positions us to do so,” said Paul Campanelli, CEO of Par Pharmaceutical. “We share Endo’s goal of developing and commercializing generic drugs in areas of greatest revenue potential, complex formulations and longer life cycles. I look forward to joining the Endo team and working together to achieve that goal.”

The purchase follows Endo’s failed attempt to acquire Salix Pharmaceuticals in March, after Valeant Pharmaceuticals provided an all-cash bid.

Source: Endo Pharmaceuticals Inc.

Last updated: 5/19/15; 12:25pm EST

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