Endo Health Solutions said Wednesday morning it will pay $225 million in cash for the private company Boca Pharmacal, which makes specialty generic medicine.
Endo already had a brand-name drug division and a generic component, both of which produced medicines that included opioid painkillers. Such painkillers are controlled substances, regulated in the United States by both the Food and Drug Administration and the Drug Enforcement Administration.
Endo's generic division is called Qualitest and this deal will add to Qualitest's pipeline of products. Endo described Boca Pharmacal's focus as being on "niche areas, commercializing and developing products in categories that include: controlled substances, semisolids, and solutions."
Endo recently moved into a new headquarters in Malvern, but the company is facing challenges on several fronts. Once closed, this acquisition is meant to immediately produce revenue for Endo. In its statement, Endo said, on a stand-alone basis, Boca Pharmacal is expected to generate earnings before interest, taxes depreciation and amortization of approximately $50 million in full year 2013.
"The acquisition of Boca Pharmacal is the first of several transactions we plan to execute as we transform Endo into a more focused specialty healthcare company with a lean operating model, able to deliver consistent earnings and revenue growth for our shareholders," Endo President and Chief Executive Officer Rajiv De Silva said in a statement. "The acquisition is aligned with our current generics footprint and will meaningfully accelerate the growth of Qualitest in 2014. I believe that the revenue and earnings contribution of this transaction, combined with the unique commercial portfolio and strong pipeline of ANDAs [abbreviated new drug application], make this an ideal fit."