Market Overview

Endo Pharmaceuticals Holdings Inc. Annouces to Acquire American Medical Systems (ENDP)


Earlier today, Goldman Sachs published a report discussing the proposed acquisition of American Medical Systems (NASDAQ: AMMD) by Endo Pharmaceuticals Holdings Inc. this morning (NASDAQ: ENDP). ENDP will pay $30 per share, or $2.9 billion including the $312 million in debt for the acquisition of AMMD.

Endo Pharmaceuticals is engaged in R&D, manufacturing, marketing and sales of branded and generic pharmaceutical products focused on pain management, urology, oncology and endocrinology. Acquiring AMMD, a provider of devices and services for male and female pelvic health, would further diversify Endo's business. Last year, Endo acquired Health Tronics, which brought over $200 million in revenues. AMMD is expected to bring $566 million in revenue to Endo, split across men's health, women's health, and benign prostate hyperplasia therapy. The acquisition of AMMD would also carry geographic diversification, with 27% revenues derived from outside of the US.

Endo expects the deal to increase EPS by $0.60 in 2012 and $0.80 in 2013 on an adjusted basis. On a pro forma basis the combined company would have approximately $3 billion of revenues in 2011 and $1 billion in EBITDA. Endo also expects $50 billion in synergies by 2013 through procurement savings, manufacturing and SG&A efficiencies.

Goldman Sachs maintains the Neutral rating, estimates and price target, which do not incorporate the proposed transaction. At the time of posting, shares of ENDP were trading at $41.46.

Posted-In: Analyst Color M&A Analyst Ratings


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