Date: 2014-10-10
Type of information: Company acquisition
Acquired company: Auxilium Pharmaceuticals (USA - PA)
Acquiring company: Endo International (Ireland)
Amount: $2.6 billion
Terms: * On January 29, 2015, Endo International announced it has completed the acquisition of Auxilium Pharmaceuticals, in a transaction valued at $2.6 billion when announced on October 9, 2014. The closing of the transaction follows the approval of the acquisition by Auxilium's shareholders on January 27, 2015, and the receipt of all required regulatory approvals. In accordance with the terms of the merger, Auxilium shareholders had the opportunity to elect one of three options with respect to transaction consideration: (i) 0.4880 Endo shares per Auxilium share (the "Stock Election Consideration"), (ii) $33.25 in cash per Auxilium share (the "Cash Election Consideration") or (iii) a standard election of $16.625 in cash and 0.2440 Endo shares per Auxilium share (the "Standard Election Consideration"), subject to proration in the case of elections to receive the Cash Election Consideration or Stock Election Consideration. Of the 54,966,186 shares outstanding that were eligible to make an election, 52,154,714, or 94.9%, elected to receive the Stock Election Consideration, 249,408, or 0.4%, elected to receive the Cash Election Consideration, 110,448, or 0.2%, elected to receive the Standard Election Consideration, and the remaining 2,451,616, or 4.5%, did not make any election and thus received the Standard Election Consideration. The result of the elections led to an oversubscription of the Stock Election Consideration. In accordance with the proration method described in the merger agreement and proxy statement/prospectus provided to Auxilium shareholders, each Auxilium share for which an election was made to receive the Stock Election Consideration will instead be entitled to receive approximately 0.3448 Endo shares and $9.75 in cash. Auxilium common stock will cease to be traded on the NASDAQ Global Market following the close of trading on January 29, 2015. * On October 9, 2014, Endo International and Auxilium Pharmaceuticals announced that they have entered into a definitive agreement under which Endo will acquire all of the outstanding shares of common stock of Auxilium for a per share consideration of $33.25 in a cash and stock transaction. The boards of directors of both companies have unanimously approved the transaction, which is valued at $2.6 billion, including the repayment and assumption of debt. The transaction will include an election mechanism for Auxilium stockholders to elect cash and stock, all-stock or all-cash consideration, subject to proration in accordance with the terms of the definitive agreement. The per share consideration represents a premium of 55 percent to Auxilium's closing price on September 16, 2014, the day Endo made public its proposal for Auxilium. Subject to aggregate cash and equity consideration limits, Auxilium stockholders may elect one of three options with respect to transaction consideration: 100 percent equity which equates to 0.488 Endo shares per Auxilium share, 100 percent cash which equates to $33.25 per Auxilium share or a standard election of an equal mix of $16.625 in cash and 0.244 Endo shares per Auxilium share. The total cash consideration will not exceed 50 percent of the total equity value and the equity consideration will not exceed 75 percent of the total equity value. Endo intends to fund the cash portion of the transaction through a combination of existing cash on hand and committed debt financing from Citi. The transaction is expected to close in the first half of 2015 and is subject to the approval of Auxilium's stockholders, regulatory approval in the U.S. and certain other jurisdictions, and other customary closing conditions. Citi served as financial advisor to Endo, Lazard provided an independent fairness opinion and Sullivan & Cromwell LLP served as legal advisor. Deutsche Bank served as lead financial advisor, Morgan Stanley served as financial advisor and Willkie Farr & Gallagher LLP and Morgan, Lewis & Bockius served as legal advisors to Auxilium.
Details: Upon completion of the transaction, Endo's pharmaceutical portfolio will have a broader offering of urology and orthopedic products that are natural complements to its current men's health and pain products. Endo expects to drive increased adoption and enhance the performance of Auxilium's Xiaflex® and accelerate development of the product in potential new indications. Endo also intends to leverage its resources to optimize Auxilium's other products, including Testopel® and Stendra®. Endo believes the combined company will be well positioned to drive organic growth across its portfolio and to capitalize on additional future strategic M&A opportunities. Given the complementary nature of the companies' product portfolios, Endo expects the combined company to achieve annual cost synergies of approximately $175 million. This synergy run-rate is expected to be fully realized on an annual basis in the first year after closing and includes Auxilium's reduction in annual operating expenses previously announced on September 9, 2014.
Related: Men's health Pain
