Endo Plans $1.75 Bn Offering to Fund Par Acquisition

The specialty pharmaceutical company, Endo International, has begun an underwritten public offering of $1.75 billion of ordinary shares to fund its recently announced $8 billion acquisition of Par Pharmaceutical Holdings. Endo will also have an option, exercisable for a period of 30 days following the date of the final prospectus supplement, for underwriters to purchase an additional $262.5 million of ordinary shares at the public offering price, less the underwriting discounts and commissions.

Endo’s bid to acquire Par is based on a purchase price that consists of approximately 18 million shares ($1.55 billion of value based on the 10-day volume weighted average share price of Endo ending on May 15, 2015) of Endo equity and $6.50 billion cash consideration to Par shareholders. The transaction is expected to close in the second half of 2015 and is subject to regulatory approval in the US and certain other jurisdictions, as well as other customary closing conditions.

The move, according to Endo would create a specialty pharmaceutical company that would include a growing generics portfolio that Endo said would put it among the top five as measured by US sales. The Par portfolio includes nearly 100 products in multiple dosage forms and delivery systems, including oral solids, oral suspensions, injectables, and high barrier-to-entry products. Par offers a pipeline consisting of more than 200 abbreviated new drug applications (ANDAs), 115 of which were filed with the US Food and Drug Administration (FDA) as of December 31, 2014. Approximately 33% of the filed ANDAs are potential first-to-file or first-to-market opportunities, and 75% of the overall development portfolio consists of Paragraph IV and first-to-file programs. It is expected that the Par R&D pipeline could generate approximately 20 to 25 ANDA filings each year in 2015, 2016, and 2017, according to Endo.

Endo expects to use the net proceeds of the offering, together with the proceeds of additional indebtedness and cash on hand, to fund the purchase price of the previously announced acquisition of Par Pharmaceutical Holdings, Inc. as well as repayments of indebtedness of Par and certain transaction expenses. The company intends to use any remaining proceeds for general corporate purposes, including acquisitions and debt repayments. However, the offering is not conditioned on such acquisition. If this pending acquisition is not consummated, the company plans to use the net proceeds of the offering for general corporate purposes, including acquisitions and debt repayment.

Source: Par Pharmaceutical Holdings

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