Endo International agrees €7bn buy of Par Pharmaceuticals in cash and stock

Endo International, the Dublin-based maker of pain drugs like Opana and Percocet, has agreed to buy Par Pharmaceuticals for $8.05bn (€7.09bn) in cash and stock as part of a plan to ignite sales growth and pursue more acquisitions.

In exchange for Par, the drugmaker agreed to give private-equity firm TPG Capital $1.55bn in stock and $6.5bn in cash, and will assume Par’s debt, the companies said in a statement yesterday.

The takeover will create a generic-drug business that is among the top five in US sales, the companies said, and will boost Endo’s earnings in the first year.

The deal helps further chief executive Rajiv De Silva’s ambitions to use a series of acquisitions to quickly expand Endo. It’s a business model De Silva helped hone at Valeant Pharmaceuticals International, where he was an executive before joining Endo in 2013.

In March, Endo lost a bidding contest to Valeant for Salix Pharmaceuticals. That purchase would have been largest by far at more than $11bn, including debt. Endo said it is seeking a capital structure allowing for more acquisitions.

Endo shares fell 3% to $82.78 after the announcement. The stock had risen 18% this year through last week.

The company will look for deals to expand its brand-name drug business, its injectable-drug unit and its international markets, De Silva said on a conference call.

Par has almost 100 products, including oral and injectable drugs, and a “solid pipeline” that includes many medicines that if approved would have a period of market exclusivity, the companies said.

Par chief executive Paul Campanelli will join Endo and lead the generics business.

The deal is expected to be completed in the second half of the year. Among Par’s generic products are versions of the sedative Ambien and dementia treatment Aricept.

Endo estimated operational and tax savings of $175m in the first 12 months after the buy.

No further shareholder approvals are needed for the deal to go through, Endo said.

Endo is one of a half-dozen US drugmakers that have shifted their tax-base addresses to Ireland in the past two years to reduce bills. The company completed its switch to Dublin from Malvern, Pennsylvania, last year.

Bloomberg


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