Endo to acquire Penwest
Endo Pharmaceuticals Holdings Inc. (NASDAQ:ENDP) will acquire partner Penwest Pharmaceuticals Co. (NASDAQ:PPCO) in a tender offer of $5 per share, or about $168 million in cash. The price is a 19% premium to Penwest's close of $4.21 on Friday, before the deal was announced. The boards of both companies have unanimously approved the tender offer, which is expected to complete in September.
Endo said the deal will maximize the value of pain drug Opana ER oxymorphone, for which Penwest receives royalties under a 1997 deal. Endo also will gain Penwest's oral drug delivery technologies, including TIMERx oral controlled release delivery system. Endo, which expects the acquisition to be immediately accretive to its 2010 EPS, raised its full-year non-GAAP diluted EPS guidance to $3.30-$3.35 from $3.25-$3.30. The company continues to expect revenue of $1.63-$1.68 billion. BofA Merrill Lynch is advising Penwest, while Lazard is advising Endo. Endo was up $0.36 to $25.18 on Monday. Penwest gained $0.52 (12%) to $4.73. ...