Endo Pharmaceuticals Plc agreed to acquire Par Pharmaceutical Holdings Inc. from TPG Capital for $8.05 billion in stock, cash and assumption of debt. In a statement, Dublin-based Endo said the new company will have a “generics business that is one of the industry's fastest growing and among the top five as measured by U.S. sales.” The deal is expected to close in the second half of 2015 and is subject to regulatory approval.
Our Take: According to Bloomberg data, EBITDA (earnings before interest, taxes, depreciation and amortization) multiples are in pharma and biotech acquisitions are the highest on record in two decades. Endo paid 66 times 2014 EBITDA, almost four times the $1.9 billion price that TPG paid to acquire the drugmaker in 2012.
But Endo executives are betting that the deal is worth it. The acquisition provides strategic benefits, including a potential $1.2 billion in added annual revenues and a pipeline of more than 200 Abbreviated New Drug Applications.