Endo Pharmaceuticals completes $2.9 billion acquisition of American Medical Systems

Closing on this acquisition “marks another milestone in the transformation of Endo” and reportedly accelerates its strategy of building a diversified healthcare company that is better able to respond to the changing economics now driving the U.S. healthcare environment

Jeffrey Bouley
CHADDS FORD, Pa.—Dotting the i's andcrossing the t's on a deal announced in mid-April, EndoPharmaceuticals announced June 20 the completion of its acquisitionof American Medical Systems Inc. (AMS), a provider of devices andtherapies for male and female pelvic health, for approximately $2.9billion in cash.
 
"Closing on this acquisition marksanother milestone in the transformation of Endo and accelerates ourstrategy of building a diversified healthcare company, better able torespond to the changing economics that drive the U.S. healthcareenvironment," says Dave Holveck, president and CEO of Endo. "AMSaccelerates our overall growth, and we are very excited about thepotential of its current commercial portfolio, as well as potentialnew product introductions."
 
As has been noted since the spring, theacquisition continues Endo's planned evolution from a product-drivencompany to a healthcare solutions provider. In addition, the deal isexpected to strengthen Endo's core urology franchise whilediversifying revenue, earnings and cash flow. Finally, bringing AMSinto the fold fulfills Endo's strategy to increase the scale of itsdevices and services business segment.
 
When figures were being bandied aboutin April, Endo expected the transaction to be immediately accretiveto adjusted diluted earnings per share upon closing and accretive by60 cents per share in 2012.
 
Endo sees a solid future incomprehensive healthcare solutions across its brandedpharmaceuticals, generics devices and services with the addition ofAMS, but particularly in the areas of pain and urology. Endo seeks tobe "the premier partner to healthcare professionals and paymentproviders, delivering an innovative suite of complementarydiagnostics, drugs, devices and clinical data to meet the needs ofpatients in areas such as pain, urology, oncology and endocrinology."
 
AMS reportedly has a leading positionin several product categories that have shown revenue growth in the"mid-to-high single-digit range," which Endo anticipates willcontinue over the long term. These include a broad range of productsfor erectile dysfunction prostheses and male and female incontinence,as well as the GreenLight laser technology for enlarged prostatetreatment. The company also has a strong pipeline of new productsthat will enhance the commercial portfolio and growth trajectory overthe next few years, according to the companies.
 
Endo also reports that AMS iswell-positioned for a continued increase in procedure volumes and asteady increase in the use of minimally invasive surgical procedures.
 
This anticipated revenue and earningsgrowth, combined with strong margins and solid free cash flowgeneration, make AMS "a compelling strategic fit for Endo,"Holveck says.
 
AMS has an experienced management team,who average between 15 and 20 years in the medical device industry,according to Endo, which says the new company complements existingplatforms in several areas, with strong manufacturing capabilities tosupport its existing portfolio and growth profile and a highlyregarded sales force with an excellent reputation in the urologyspace.
 
Endo is a specialty healthcaresolutions company, focused on high-value branded products andspecialty generics, while AMS is known for providing medical devicesand therapies that help restore pelvic health, and Endo says it isrecognized as "a technology leader for developing minimallyinvasive and more cost effective solutions, serving urologists,urogynecologists and gynecologists." AMS has three businesssegments: men's health, women's health and benign prostatichyperplasia therapy, with approximately 73 percent of its sales inthe U.S. and the remainder coming from its international presence inEurope, Canada and the Asia Pacific and Latin America regions.
 
In addition to AMS, Endo's wholly ownedsubsidiaries include HealthTronics Inc. and QualitestPharmaceuticals.
 

Jeffrey Bouley

Subscribe to Newsletter
Subscribe to our eNewsletters

Stay connected with all of the latest from Drug Discovery News.

Front Cover

Latest Issue  

• Volume 18 • Issue 12 • December 2022/January 2023

December 2022/January 2023

December 2022/January 2023 issue