More merger mania as Endo buys Par for $8.05 billion

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The pharmaceutical merry-go-round continues to spin with Ireland-domiciled Endo International set to buy US generics player Par Pharmaceutical in a deal valued at $8.05 billion.

Endo is buying Par from the private equity firm TPG Capital for about $6.5 billion in cash and 18 million shares. TPG acquired Par in 2012 for around $1.9 billion. 

The combination “will create a leading specialty pharmaceutical company with a generics business that is one of the industry’s fastest-growing and among the top five as measured by US sales”, according to Endo. The Par portfolio includes nearly 100 products in multiple dosage forms and delivery systems and a pipeline consisting of more than 200 Abbreviated New Drug Applications, 115 of which were filed with the US regulator as of the end of 2014.

Endo already has a generics business, called Qualitest, but Par adds “a strong portfolio of high barrier-to-entry and attractive gross margin products while also creating a powerful corporate platform for future growth and strategic M&A,” said chief executive Rajiv De Silva. Paul Campanelli, Par CEO, will head up the generics business.

The deal should generate $175 million in operational and tax synergies that are expected within the first 12 months following completion. The transaction comes two months after Endo withdrew its $10.4 billion offer for Salix Pharmaceuticals (subsequently bought for $11 billion by Valeant) and just a week after it paid $130 million for a portfolio of branded and generic products from South Africa’s Aspen Pharmacare.