Endo International (ENDP) announced that its wholly owned subsidiaries, Endo Limited, Endo Finance LLC and Endo Finco Inc. priced $1.2 billion aggregate principal amount of 6.00% senior notes due Feb 2025 at par with a face value of $1,000 on Jan 20. The company had announced the proposed private offering of senior notes earlier this week.
Endo Limited, Endo Finance LLC and Endo Finco Inc. will undertake the obligation of these unsecured and unsubordinated notes, which will be guaranteed by certain direct and indirect subsidiaries of Endo Limited.
The company intends to use the net proceeds from the senior notes offering to finance its acquisition of Auxilium Pharmaceuticals, Inc. (AUXL) and refinance certain indebtedness of Auxilium Pharma. Endo also intends to pay the related fees and expenses from the funds raised. Apart from the proceeds from the offering, the company also intends to use its cash on hand and revolver borrowings under its credit facility to meet these expenses.
We remind investors that Endo is set to acquire Auxilium Pharma. The transaction is valued at approximately $2.6 billion, including the repayment and assumption of debt. The company expects the deal to close in the first quarter of 2015. The Auxilium Pharma acquisition will boost Endo’s portfolio with products like Xiaflex (Dupuytren's contracture and Peyronie's disease), Testopel (testosterone replacement therapy) and Stendra (erectile dysfunction). The deal is expected to boost the company’s sales and earnings growth from 2015 (read more: Endo to Buy Auxilium for $2.6B, Diversify Portfolio).
Endo carries a Zacks Rank #1 (Strong Buy). Other favorable-ranked stocks in the health care sector include AMAG Pharmaceuticals, Inc. (AMAG) and Alexion Pharmaceuticals, Inc. (ALXN). While Alexion carries the same Zacks Rank as Endo, AMAG holds a Zacks Rank #2 (Buy).
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