Endo to Buy Generics Maker Par Pharma for $8 Billion -- 3rd Update

By Chelsey Dulaney 

Endo International PLC agreed to buy Par Pharmaceutical Holdings Inc. from private-equity firm TPG for about $8 billion in cash and stock, giving Dublin-based Endo access to profitable generic drugs.

Par, which TPG took private in 2012 for about $1.9 billion, has a portfolio of nearly 100 products, including oral solids and injectables. Endo said the combined company would have a generics business that ranks among the top five by U.S. sales.

The deal comes after Endo lost a bid to buy Salix Pharmaceuticals Ltd. in March after being outbid by Valeant Pharmaceuticals International Inc.

Shares of Endo fell 2.7% to $83.07 in morning trading.

The deal for the Chestnut Ridge, N.Y.-based Par includes 18 million shares--valued at about $1.5 billion, based on Friday's close--and $6.5 billion in cash. The deal's total value of $8.05 billion, includes a small amount of debt assumption.

The deal, subject to regulatory approval, is expected to close in the second half of the year.

The pharmaceutical industry has been a particularly hot sector for deal-making lately, as companies take advantage of a favorable M&A environment to buy up rivals to add to their sales.

Last year was the best year for mergers in the industry since Dealogic began keeping records in 1995.

So far this year, Pfizer Inc. has struck a $16 billion deal to buy Hospira Inc., Merck & Co. bought antibiotic makerCubist Pharmaceuticals Inc. for $8.4 billion, and Alexion Pharmaceuticals Inc. agreed to pay a 124% premium to buy Synageva BioPharma Corp.

Meanwhile, Endo has been benefiting from its recent acquisitions. Earlier this month, Endo reported better-than-expected adjusted earnings from operations in its first quarter.

In January, the company closed its $2.6 billion purchase of Auxilium Pharmaceuticals Inc., a transaction that followed deals to buy Boca Pharmacal and DAVA Pharmaceuticals. The latter deals have been key for its generic-drug segment, which jumped 68% in the latest quarter.

Endo expects the Par deal to add to its adjusted per-share earnings within a year and forecast double-digit growth in 2016.

The company expects $175 million in operational and tax synergies.

Write to Chelsey Dulaney at [e-mail]

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