Endo targets American Medical Systems for $2.9 billion

A company that began life in the pharmaceutical sector is venturing forth into devices in its quest to become a more diversified health care company.

Chadds Ford, Pa.-based Endo Pharmaceuticals Holdings Inc. (NSDQ:ENDP) announced that the company is buying Minnetonka-based American Medical Systems Holdings Inc. (NSDQ:AMMD), a manufacturer of medical devices focusing on male and female pelvic health for $30 per share, or $2.9 billion in cash. The deal includes Endo assuming and repaying $312 million of AMS debt.

Endo projected that 2011 revenue for the combined company would be $3 billion with $1 billion in earnings before interest, tax, depreciation and amortization (EBITDA). The acquisition would add about 60 cents per share to Endo’s 2012 adjusted diluted earnings per share once it closes, the company estimated.

The combined company would also have a total of 4,000 employees. AMS employs 1,200 people in nine countries, according to its website. Its first product — an artificial urinary sphincter implant — came out in 1972 and the company went public in 2000.

“Through the acquisition of AMS, we will gain scale in devices and services, and will be positioned as a leading provider of healthcare solutions in the field of pelvic health, with a full spectrum of product offerings ranging from pharmaceuticals to medical devices,” Endo CEO Dave Holveck said in prepared remarks.

In 2010, Endo bought HealthTronics, which makes a full line of urology equipment and products, including lithotripters and surgical lasers for treatment of enlarged prostate (BPH).

The transaction needs to be approved by AMS shareholders and is expected to close in the third quarter of 2011.

AMMD shares rocketed more than 32 percent to close at $29.50, up $7.17 for the day. ENDP shares ended the day up 21 cents, or about a half percent, to close at $41.06.

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