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 further 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 follows Endo losing a bid to buy Salix Pharmaceuticals
Ltd. in March after being outbid by Valeant Pharmaceuticals
International Inc.
Shares in Endo slipped 3.5% to $82.34 in midday trading on the
Nasdaq Stock Market.
The deal for Par, based in Chestnut Ridge, N.Y., includes 18
million shares--valued at roughly $1.5 billion, based on Friday's
close--and $6.5 billion in cash. The deal has a total value of
$8.05 billion, which includes a small amount of debt assumption,
and is expected to close in the second half of the year.
The deal comes about 15 months after Endo relocated to Ireland
through a "tax inversion" deal with Canada's Paladin Labs Inc. Such
deals, in which U.S. companies acquired foreign rivals and
redomiciled in low-tax companies, spiked last year before the
Treasury Department moved to make inversions more difficult and
less lucrative.
Companies like Endo that closed inversion deals before the new
rules took effect in September have been snapping up U.S. companies
to further leverage the tax advantages gained through their
overseas moves. Endo earlier this year bought Pennsylvania-based
Auxilium Pharmaceuticals Inc. for $2.6 billion, and it completed a
deal to buy New Jersey-based DAVA Pharmaceuticals Inc. in
August.
Endo expects $175 million in operational and tax synergies from
the Par purchase. Endo sees the deal adding to its adjusted
per-share earnings within a year and forecast double-digit growth
in 2016.
The deals for DAVA and Boca Pharmacal have been important for
Endo's generic-drug segment, which jumped 68% in the latest
quarter.
The pharmaceutical industry has been a particularly hot sector
for deal-making lately, as companies take advantage of a favorable
mergers-and-acquisitions 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.
Liz Hoffman contributed to this article.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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