Endo International engages in acquisition

On Behalf of | Oct 15, 2014 | Mergers & Acquisitions

In a move meant to increase the amount of branded pharmaceuticals it can offer, Endo International Plc has opted to acquire Auxilium Pharmaceuticals Inc. In New York, Auxilium’s shares recently jumped 9 percent, and Endo’s stock fell nearly 6 percent during the same period. Additionally, Auxilium’s testosterone drugs, Testopel and Testim, will become part of Endo’s offerings.

Endo International announced its plans to purchase Auxilium back on Sept. 16. The price Endo plans on paying is $33.25 for each share, and this will equate to about $2.6 billion. Those who own shares of Auxilium will have the option of receiving stock, cash or a combination of both for their shares in the company. The price paid is over 50 percent higher than what Auxilium was valued at when Endo International announced its intention to purchase.

Though the Food and Drug Administration has expressed concerns over the use of testosterone drugs, Auxilium Pharmaceuticals still showed a profit of $275 million in 2013. Endo International plans to cut its spending on research and development after the acquisition. The chief executive officer of the corporation says the company will be able to do this by focusing more on drugs that carry fewer risks and lower costs. Due to the acquisition, Auxilium will also be able to garner tax benefits because Endo is incorporated in Ireland.

Business acquisitions and mergers is a complex, and it may be important for parties to such transactions to understand the legality the actions. In addition, because the involved parties may have competing interests, negotiations may become adversarial. However, business attorneys may be able to help clients protect their interests in negotiations with the other party.

Source: Businessweek Bloomberg, “Endo to Buy Auxilium for $2.6 Billion to Gain Men’s Drugs”, David Welch and Cynthia Koons, October 09, 2014

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