Endo ($ENDP) hasn't quite wrapped up its $8 billion deal for generics maker Par Pharmaceutical, recently agreeing to a loan package to speed things along. Now, the drugmaker is lining up more funding with a $1.75 billion stock offering.
Dublin, Ireland-based Endo says it plans to use the proceeds to finance its Par buy, back up other acquisitions and pay down debt, including debt taken on for the Par transaction. The announcement comes a couple of weeks after Endo said it had grabbed $9.275 billion in deal financing from Deutsche Bank and Barclays.
Endo in May revealed it would scoop up Par from private equity firm TPG Capital for $8 billion to get its hands on the company's injectables portfolio. The drugmaker is set to inherit about 100 products through the deal, which together accounted for about $1.3 billion in sales in 2014; it's hoping the buy will help it hit double-digit revenue growth.
|Endo CEO Rajiv De Silva|
"This transaction with Par builds upon our generics growth, adding a strong portfolio of high barrier-to-entry and attractive gross margin products while also transforming Endo, creating a powerful corporate platform for future growth and strategic M&A," Endo CEO Rajiv De Silva said at the time.
If De Silva's past strategy is any indication, more dealmaking could be on the horizon. The company struck a series of deals last year, snatching up Paladin Labs to complete a tax inversion and shelling out more than $2 billion for Canada's Auxilium. And Endo is "casting a pretty wide net" when it comes to deal shopping, Piper Jaffray analyst David Amsellem said earlier this year, looking for smaller, less well-known companies to spur generics growth.
But Endo might face some obstacles along the way as it recovers from losing its bid for Salix ($SLXP) to serial buyer Valeant ($VRX) in March. Salix was "kind of that last low-hanging fruit sitting out there," Morningstar analyst Michael Waterhouse said at the time. "There are still a lot of small companies out there that they'll continue to look for but it's definitely becoming a much more crowded buyers' market."
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