Endo International is buying privately-held Par Pharmaceuticals for $8.05 billion, in a transformative move that significantly expands its generics presence.

The transaction, which has been approved by both sets of directors and is expected to close in the second half of this year, will see Endo pay around $1.55 billion in equity (18 million shares) and $6.50 billion in cash to Par shareholders.

According to the firms, their marriage will create a leading specialty pharmaceutical company with a generics business that is one of the industry's fastest growing and among the top five as measured by US sales, positioning Endo for long-term double-digit revenue and financial stability.

“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," said chief executive Rajiv De Silva, explaining his firm’s interest in the deal. 

Par chief executive Paul Campanelli will join Endo to lead the generics business. Commenting on the deal, he said the companies share the same goal of “developing and commercialising generic drugs in areas of greatest revenue potential, complex formulations and longer life cycles”.

News of the deal comes two months after Endo said it had withdrawn its $11-billion offer for Salix Pharmaceuticals to focus on other opportunities in its “robust deal pipeline”, thus paving the way for the latter’s potential merger with Valeant, and just days after it paid $130 million for a portfolio of branded and generic products from South African drugs giant Aspen Pharmacare.