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Endo To Purchase Par Pharmaceutical

Acquisition: Generic drug firms agree to $8 billion merger

by Ann M. Thayer
May 18, 2015

Credit: Shutterstock
Acquiring Par Pharmaceuticals will place Endo among the top U.S. generic drug firms.
A stock photo of pill blister packs.
Credit: Shutterstock
Acquiring Par Pharmaceuticals will place Endo among the top U.S. generic drug firms.

Endo, a specialty drug firm based in Ireland, will pay $8.1 billion in cash and stock to acquire the U.S.-based generic drug firm Par Pharmaceutical.

The combined business will have about $4.2 billion in annual sales. The majority of those sales are in the generic drug market and will make the company the fifth-largest generics firm in the U.S., according to Endo.

“This transaction with Par builds upon our generics growth, adding a strong portfolio of high barrier-to-entry and attractive gross margin products,” Endo CEO Rajiv De Silva said when announcing the deal.

It also follows Endo’s growth strategy of acquiring businesses. In early 2014, Endo moved its headquarters to Ireland through a tax inversion deal in which it acquired Paladin Labs. Since then it has acquired two other smaller companies, but its most recent attempted $11 billion takeover of the gastrointestinal drug firm Salix Pharmaceuticals ended in March when Valeant Pharmaceuticals came in with a higher bid.

Par’s current owners are set to make a substantial return on selling the private company. In late 2012, the equity investment firm TPG acquired Par for $1.9 billion. TPG clearly was looking to exit the investment—in March, Par had filed with regulators for a proposed initial public offering of stock.

The generic drug area has been rife with merger and acquisition moves. The most recent one has been Teva Pharmaceutical Industries hostile $40 billion bid for Mylan. In contrast, the Endo-Par transaction has been unanimously approved by the boards of the two companies, is supported by both sides’ management, and requires no further shareholder approval for the deal to close.


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