Endo Health to buy Canada's Paladin Labs in $1.7-bn deal

US-based diversified healthcare company Endo Health Solutions Inc yesterday agreed to buy Canadian peer Paladin Labs Inc, in a $1.7-billion stock and cash deal in  a bid to expand its footprint in Canada, Nexico and South Africa.

Under the terms of the deal, which has been unanimously approved by the boards of both companies, Paladin's shareholders will receive 1.6331 shares of New Endo stock and $1.16 in cash.

In addition, Paladin's shareholders will receive one share of Knight Therapeutics Inc, a newly- formed public company in Canada.

The transaction values each Paladin share at $77, a 20 per cent premium to Paladin closing share price on 4 November of $63.91.

Post closing, both Endo Health and Paladin will be folded into a newly-formed Irish holding company and current Endo shareholders will own about 78 per cent of the new company, while Paladin shareholders will own the rest.

"The acquisition of Paladin Labs accelerates Endo's transformation from an integrated health solutions company to a top tier global specialty healthcare leader," said Rajiv De Silva, president and CEO of Endo.

"Paladin Labs has a proven track record of acquiring and in-licensing innovative new products, and developing international growth platforms.  Paladin Labs' stable and growing cash flows and strong Canadian franchise complement our existing portfolio and further diversify our pharmaceutical product mix and geographic reach,'' he added.

Montreal-based Paladin is a specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian and world markets.

The Toronto Stock Exchange-listed company produces treatments for pain, urology and allergy, and it has a strong pipeline of new product launches set to take place over the next 12 months.

It has over 60 marketed drugs and a strong partnership with leading global pharmaceutical companies.

In addition to its Canadian operations, Paladin owns a controlling stake in Laboratorios Paladin, SA de CV in Mexico and a 61.5-per cent stake in publicly-traded Litha Healthcare Group Limited in South Africa.

Pennsylvania-based Endo Health as created in 1997 through a successful management buyout of Endo Laboratories's generic products along with 12 important brands from DuPont Merck Pharmaceutical Company, a joint venture between Merck And DuPont.

Its branded segment offers Lidoderm, Opana ER, Opana, Percocet, Voltaren Gel, Frova, Supprelin, Vantas, Valstar, and Fortesta Gel products in pain management, urology, endocrinology, and oncology areas, while its generics division provides non-branded generic products in the pain management, urology, central nervous system disorders, immunosuppression, oncology, women's health, and hypertension markets.

The company has a market cap of $6.4 billion and posted net loss of $ $740 million on revenues of $3 billion.