Endo surges 8% on Qualitest buy

SAN FRANCISCO (MarketWatch) — Endo Pharmaceutical Holdings Inc. shares rallied as much as 12% Tuesday after the company said it will buy generic-drug maker Qualitest Pharmaceuticals for $1.2 billion from private-equity firm Apax Partners.

 stock pulled back slightly but still closed up $2.49 at $33.10 after trading near three-year highs earlier in the session.

The shares have gained 61% since the beginning of the year.

Qualitest had been part of Apax Partners since 2007, growing into the sixth-biggest generic-drug company in the U.S., measured in terms of prescriptions filled, during that time.

“Qualitest, and now Endo, represents an important part of the solution to the challenges faced by the U.S. health-care system,” said Buddy Gumina, partner and co-head of global health care at Apax.

The deal is expected to close late in the fourth quarter of 2010 or early in the first quarter of 2011.

The combined company will have 46 generic drugs, targeting everything from cancer to high blood pressure, under review by the U.S. Food and Drug Administration.

“The acquisition of Qualitest accelerates our stated strategy of building a diversified health-care company, better able to respond to the changing economics that drive the U.S. health-care environment,” said David Holveck, Endo’s chief executive officer, in a statement.

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Endo said the deal, which will be paid for with $500 million cash from its balance sheet along with other loans, will add about $400 million in annualized revenue and 40 cents a share in annualized adjusted profit.

Endo reiterated its 2010 revenue target of between $1.63 billion and $1.68 billion with full-year earnings of $3.30 to $3.35 a share. Analysts polled by FactSet Research forecast a 2010 profit of $3.32 a share.

View more information: https://www.marketwatch.com/story/endo-stock-jumps-12-after-qualitest-buy-2010-09-28

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