Shares of drug developer Endo Pharmaceuticals Holdings Inc. (ENDP) are higher by $2.61 in the session on news that the co. agreed to buy on Tuesday privately held American generic drug maker Qualitest Pharmaceuticals for $1.2 billion in cash.
Endo, who has been on a steady acquisition path, most recently buying Opana ER partner Penwest Pharma for $144 million, said in a press release that the acquisition will bring the company a “broad range of generic drugs to Endo’s encompassing 175 product families”, as well as an “extensive pipeline” of drugs in development.
Under the terms of the agreement, which have been unanimously approved by Endo’s Board of Directors, Endo will acquire 100 percent of Qualitest and finance the purchase using $500 million in cash from its balance sheet and drawing down an existing $300 million revolving credit facility. Endo also said it has secured financing for up to $400 million.
Commenting on today’s transaction, David Holveck, President and Chief Executive Officer of Endo, said, “This is an exciting day for Endo. The acquisition of Qualitest accelerates our stated strategy of building a diversified healthcare company, better able to respond to the changing economics that drive the U.S. healthcare environment.”
The deal is expected to close in the last quarter of this year, pending the customary approvals.
Shares of Endo rose to a three-year high of $34.26 in morning trade on Nasdaq.