Endo Buys Par Pharmaceutical for $8.05B to Expand in U.S. Generics

NEW YORK (The Deal) -- Branded generics and medical devices maker Endo International (ENDP) on Monday agreed to buy Par Pharmaceutical for $8.05 billion in what appears to be a profitable exit for Par's owner and proof that drugmakers are still prescribing major deals.

Nasdaq-listed, Dublin-based Endo would pay $6.5 billion in cash and 18 million of its own shares, which it valued at $1.55 billion, to buy Par from Fort Worth, Texas-based private equity shop TPG. Endo said it would also absorb the target's debt, which stood at $1.93 billion at the end of last year.

"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," said Endo CEO and President Rajiv De Silva in a statement.

TPG will likely profit nicely in the agreement after putting $700 million of its own funds to buy Par for $1.9 billion in 2012, which was publicly traded at the time. TPG filed for an initial public offering for the business in March, when it organized $425 million in new financing at Par to pay a $535 million dividend.

That's on top of a $494.3 million dividend in February 2014 as Par bought injectables maker JHP Group in just one of the string of acquisitions made by Par under TPG. TPG put $110 million of its own equity into the JHP acquisition.

Par, of Woodcliff Lake, N.J., also bought India's Edict Pharmaceuticals for $38 million in February 2012 and Anchen Pharmaceuticals for $410 million in August 2011.

Monday's agreement is a much-needed salve for Endo, which has a lengthy dealmaking resume but was foiled in a March bid for Salix Pharmaceuticals (SLXP) by a $15.8 billion offer from Canada's Valeant Pharmaceuticals (VRX).

Endo in January completed its $2.6 billion acquisition of testosterone maker Auxilium Pharmaceuticals and redomiciled to Ireland for tax reasons as part of its $1.6 billion acquisition of Montreal-based Paladin Labs in 2013. It now operates out of Malvern, Pa.

Par CEO Paul Campanelli will become head of Endo's generics division, the suitor's biggest. Par had first-quarter sales of $353 million, resulting in $20.3 million in net profit. Endo said it expects to save $175 million each year by eliminating overlapping functions and through tax benefits and hopes to see double-digit growth because of the deal after the first 12 months.

Read more from:

More from Mergers and Acquisitions

Could Spotify Be Next on Amazon's Wish List?

Could Spotify Be Next on Amazon's Wish List?

Sprint, T-Mobile Might Have to Do More Than Make Promises to Get Deal Approved

Sprint, T-Mobile Might Have to Do More Than Make Promises to Get Deal Approved

Xerox Received Interest From HPQ Before Fuji Deal: Sources

Xerox Received Interest From HPQ Before Fuji Deal: Sources

Divestitures at Newell Expected in Weeks: Wells Fargo

Divestitures at Newell Expected in Weeks: Wells Fargo

In Biopharma M&A, 'Where There's Real Innovation There's Someone Willing to Pay'

In Biopharma M&A, 'Where There's Real Innovation There's Someone Willing to Pay'