Endo Pharmaceuticals (ENDP) has agreed to pay approximately $8 billion to buy Par Pharmaceuticals from private equity firm TPG Capital. With this deal Endo will expand upon its current generic product pipeline. The buyout occurred in both a cash and stock deal, which was approved by the boards of both companies. Endo will pay TPG Capital $6.5 billion in cash and about 18 million Endo shares, which are roughly worth about $1.55 billion. To make this deal happen, Endo had to secure some funding from DeutscheBank and Barclays.
Shares of Endo Pharmaceuticals tanked by 5+% on this news, ending the market day at $80.77 as investors were skeptical about the productivity of the deal. Endo states that it will be a good boost for the company because it expects to save $175 million each year by eliminating overlapping functions. The company also states that after 12 months it expects double-digit revenue growth because of this deal. That is because Par has about 100 products that are expected to contribute to this growth. In addition Par has about 115 pending New Drug Applications — NDA — filed with the FDA.
TPG Capital comes out on top regardless, because the company bought Par Pharmaceuticals back in 2012 for only $1.9 billion. Activist firm Relational Investors LLC. was pressuring Par to sell itself at the time. In March, TPG filed an S-1 for a $100M IPO for Par Pharmaceuticals with the suggested ticker PRX.
