Tuesday, April 12, 2011

Endo Pharmaceuticals Continues Buying Spree

Endo has reached an agreement to acquire American Medical Systems (AMS) for $30 per share, or $2.9 billion in cash, in another step to further diversity and strengthen Endo’s product portfolio. The acquisition strengthens Endo’s market position for medical devices and therapies used for male and female pelvic health, which aligns under Endo’s urology business which the company has been aggressive in building up. In addition, the acquisition also steers the company away from a reliance on branded pharmaceuticals, which are costly and time-consuming to develop. The company has committed financing from both Morgan Stanley and Bank of America which will help cover the cost of the acquisition, along with cash from Endo’s balance sheet. David Holveck has stated that this will end Endo’s buying spree, with the company now focused on realizing synergies, expected to reach $50mm in 2013, and on paying down its debt which has accumulated over the last several years. The deal is expected to close by the third quarter of this year and add an estimated $.60 to adjusted EPS next year, then contributing $.80 to EPS in 2013.


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