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8-K - FORM 8-K - AMERICAN MEDICAL SYSTEMS HOLDINGS INC | c64015e8vk.htm |
EX-2.1 - EX-2.1 - AMERICAN MEDICAL SYSTEMS HOLDINGS INC | c64015exv2w1.htm |
EX-10.1 - EX-10.1 - AMERICAN MEDICAL SYSTEMS HOLDINGS INC | c64015exv10w1.htm |
For Immediate Release
For Endo:
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For AMS: | |
Investors / Media
|
Anthony Bihl | |
Blaine Davis
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President & CEO | |
(610)-459-7158
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(952) 930-6334 | |
Investors
|
Mark Heggestad | |
Jonathan Neely
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EVP & CFO | |
(610)-549-6645
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(952)-930-6495 | |
Media |
||
Kevin Wiggins |
||
(610) 459-7281 |
ENDO ANNOUNCES AGREEMENT TO ACQUIRE AMERICAN MEDICAL SYSTEMS FOR $2.9 BILLION
| Furthers Endos evolution from a product-driven company to a healthcare solutions provider | |
| Strengthens Endos leading core urology franchise while diversifying revenue, earnings and cash flow | |
| Fulfills Endos strategy to build scale in devices and services business segment | |
| Transaction expected to be immediately accretive to adjusted diluted earnings per share upon close and accretive by $0.60 in 2012 |
Chadds Ford, PA and Minnetonka, MN April 11, 2011 Endo Pharmaceuticals (Nasdaq: ENDP) and
American Medical Systems (AMS) (Nasdaq: AMMD) announced today that they have entered into a
definitive agreement under which Endo will acquire AMS, a leading provider of world-class devices
and therapies for male and female pelvic health, for $30 per share, or $2.9 billion in cash, which
includes the assumption and repayment of $312 million of AMS debt. The combined company will be
positioned to deliver more comprehensive healthcare solutions across its diversified businesses in
branded pharmaceuticals, generics and devices and services, in the key therapeutic areas of urology
and pain.
AMS is a market leading provider of medical devices and therapies that help restore pelvic health,
and is recognized as a technology leader for developing minimally invasive and more
cost effective solutions, serving urologists, urogynecologists, and gynecologists. AMS business
consists of three segments: Mens Health, Womens Health and BPH (Benign Prostatic Hyperplasia)
Therapy, with approximately 73 percent of its sales in the U.S. and the remainder coming from its
international presence in Europe, Canada and the Asia Pacific and Latin America regions.
The acquisition will bring Endo scale in its devices and services business segment, and the
combination of AMS with Endos existing platform will provide additional cost-effective solutions
across the entire urology spectrum. In addition, the acquisition will further Endos
diversification and increase revenue, earnings and cash flow streams. On a 2011 pro forma basis,
the combined company, with approximately 4,000 employees, would have had revenues of approximately
$3 billion and EBITDA of approximately $1 billion.
Commenting on todays transaction, Dave Holveck, President and Chief Executive Officer of Endo,
said, This acquisition is a great step in achieving Endos core strategy. We are creating a
company uniquely positioned to respond to the changing healthcare environment and the competitive,
rapidly consolidating industry landscape. 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.
The transaction accelerates Endos growth, enhanced by the growth potential of AMS current
existing commercial portfolio, as well as potential new product introductions. AMS has a leading
position in several product categories that have grown revenues in the mid-to-high single digit
range, which is anticipated to continue over the long term. These include a broad range of products
for erectile dysfunction prostheses and male and female incontinence, as well as
GreenLight® laser technology for enlarged prostate treatment. The company also has a
strong pipeline of new products that will enhance the commercial portfolio and growth trajectory
over the next few years.
AMS also is well positioned for a continued increase in procedure volumes and a steady increase in
the use of minimally invasive surgical procedures. This anticipated revenue and earnings growth,
combined with strong margins and solid free cash flow generation, make AMS a compelling strategic
fit for Endo.
Anthony Bihl, President and Chief Executive Officer of AMS, added: Todays announcement brings
together two market leading companies, with complementary strengths and assets. I believe that the
two will be a great strategic fit, with AMS building on Endos existing devices & services segment
and allowing our management and employees to accelerate the growth of our business to improve the
quality of life for a growing number of men and women.
AMS has an experienced management team, who average between 15 and 20 years in the medical device
industry. AMS complements Endos existing platforms in several areas, with strong manufacturing
capabilities to support its existing portfolio and growth profile. Importantly, AMS also has a
highly regarded sales force with an excellent reputation in the urology space.
Under the terms of the merger agreement, which has been unanimously approved by the Boards of
Directors of both companies, Endo will acquire 100 percent of the shares of AMS for $30 per share
or a total cash consideration of $2.9 billion in cash, which includes the assumption and repayment
of $312 million of AMS debt. Endo has fully committed financing in place to complete the
transaction.
Financial Benefits
Endo expects the transaction to be immediately accretive in 2011 on an adjusted diluted EPS basis.
Endo expects that the combination will be immediately accretive to adjusted diluted earnings per
share upon close and accretive by $0.60 in 2012, growing to approximately $0.80 in 2013. Endo also
expects to achieve at least $50 million in cost synergies by 2013. These synergies are expected to
come from duplicative SG&A expenditures, manufacturing efficiencies, and procurement savings. On a
reported or GAAP basis, Endo expects the transaction to be dilutive to 2011 earnings by $0.61,
dilutive to 2012 earnings by $0.05 and accretive to 2013 earnings by $0.25, reflecting purchase
accounting and other transaction-related charges.
The transaction is subject to approval by AMS stockholders and clearance by the relevant antitrust
authorities, and is expected to close late in the third quarter of 2011.
Morgan Stanley and BofA Merrill Lynch have provided fully committed financing to Endo to close this
transaction.
Financial Guidance Reiterated
Endo also reiterated its stand alone 2011 revenue guidance of between $2.35 to $2.45 billion and
full year adjusted diluted earnings per share to be between $4.20 to $4.30 per share. Endo also
estimates reported (GAAP) diluted earnings per share to be between $2.43 and $2.53 per share.
Conference Call and Webcast Information
Endos management team will host a conference call and audio webcast on Monday, April 11 at 8:30
a.m. EDT to discuss this transaction. Interested parties may call 866-383-7989 (domestic) or
617-597-5328 (international) and enter code 72064439. Please dial in 15 minutes prior to the
scheduled start time. A replay of the call will be available until 11:59 p.m. EDT on April 24 by
dialing 888-286-8010 (domestic) or 617-801-6888 (international), passcode 63346249.
A simultaneous audio Webcast of the call may be accessed by visiting www.endo.com. A replay of the
Webcast will be available until 11:59 p.m. EDT on April 24. The replay can be accessed by clicking
on Events in the Investor Relations section of the Website. Please connect to the Website at
least 15 minutes prior to the start of the conference call to ensure adequate time for any software
download that may be necessary.
About Endo
Endo Pharmaceuticals is a U.S.-based, specialty healthcare solutions company, focused on high-value
branded products and specialty generics. Endo is redefining its position in the healthcare
marketplace by anticipating and embracing the evolution of health decisions based on the need for
high-quality and cost-effective care. We aim to be the premier partner to healthcare professionals
and payment providers, delivering an innovative suite of complementary diagnostics, drugs, devices
and clinical data to meet the needs of patients in areas such as pain, urology, oncology and
endocrinology. For more information about Endo Pharmaceuticals, and its wholly owned subsidiaries
HealthTronics, Inc. and Qualitest Pharmaceuticals, please visit http://www.endo.com/.
Skadden Arps Slate Meagher & Flom LLP acted as legal counsel to Endo.
About American Medical Systems
American Medical Systems, headquartered in Minnetonka, Minnesota, is a diversified supplier of
medical devices and procedures to treat incontinence, erectile dysfunction, benign prostatic
hyperplasia (BPH), pelvic floor prolapse and other pelvic disorders in men and women. These
disorders can significantly diminish ones quality of life and profoundly affect social
relationships. In recent years, the number of people seeking treatment has increased markedly as a
result of longer lives, higher-quality-of-life expectations and greater awareness of new treatment
alternatives. American Medical Systems products reduce or eliminate the incapacitating effects of
these diseases, often through minimally invasive therapies. The Companys products were used to
treat approximately 340,000 patients in 2010.
More information about AMS and its products can be found at its website
http://www.AmericanMedicalSystems.com and in AMS Annual Report on Form 10-K for 2010 and its other
SEC filings.
J.P. Morgan Securities LLC acted as exclusive financial advisor and Latham & Watkins LLP acted as
legal counsel to AMS.
Forward Looking Statements
This press release contains forward-looking statements regarding, among other things, the proposed
business combination between Endo and AMS, Endos and AMS financial position, results of
operations, market position, product development and business strategy, as well as estimates of
Endos future total revenues, future expenses, future net income and future earnings per share.
Statements including words such as believes, expects, anticipates, intends, estimates,
plan, will, may intend, guidance or similar expressions are forward-looking statements.
Because these statements reflect Endos of AMS current views, expectations and beliefs concerning
future events, these forward-looking statements involve risks and uncertainties. Investors should
note that many factors could affect the proposed business combination of the companies, future
financial results and could cause actual results to differ materially from those expressed in
forward-looking statements contained in this press release. These factors include, but are not
limited to: the risk that the acquisition will not close; the risk that Endos business and/or AMS
business will be adversely impacted during the pendency of
the acquisition; the risk that the operations of the two companies will not be integrated
successfully; Endos and AMS ability to successfully develop, commercialize and market new
products; timing and results of pre-clinical or clinical trials on new products; Endos and AMS
ability to obtain regulatory approval of any of their respective pipeline products; competition for
the business of Endos branded and generic products, and in connection with its acquisition of
rights to intellectual property assets; market acceptance of Endos and AMS future products;
government regulation of the pharmaceutical and medical device industry; Endos dependence on a
small number of products; Endos dependence on outside manufacturers for the manufacture of a
majority of its products; Endos dependence on third parties to supply raw materials and to
provide services for certain core aspects of its business; new regulatory action or lawsuits
relating to Endos use of narcotics in most of its core products; Endos exposure to product
liability claims and product recalls and the possibility that Endo may not be able to adequately
insure itself; the successful efforts of manufacturers of branded pharmaceuticals to use litigation
and legislative and regulatory efforts to limit the use of generics and certain other products;
Endos ability to successfully implement its acquisition and in-licensing strategy; regulatory or
other limits on the availability of controlled substances that constitute the active ingredients of
some of its products and products in development; the availability of third-party reimbursement for
Endos products; the outcome of any pending or future litigation or claims by third parties or the
government, and the performance of indemnitors with respect to claims for which Endo has been
indemnified; Endos dependence on sales to a limited number of large pharmacy chains and wholesale
drug distributors for a large portion of its total revenues; a determination by a regulatory agency
that Endo is engaging or has engaged in inappropriate sales or marketing activities, including
promoting the off-label use of its products; the risk that demand for and acceptance of Endos
products or services may be reduced; the risk of changes in governmental regulations; the impact of
economic conditions; the impact of competition and pricing and other risks and uncertainties,
including those detailed from time to time in the companies periodic reports filed with the
Securities and Exchange Commission, including current reports on Form 8-K, quarterly reports on
Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption RISK
FACTORS in their annual reports on Form 10-K for the year ended Dec. 31, 2010, which have been
filed with the Securities and Exchange Commission. The forward-looking statements in this press
release are qualified by these risk factors. These are factors that, individually or in the
aggregate, could cause the companies actual results to differ materially from expected and
historical results. The companies assume no obligation to publicly update any forward-looking
statements, whether as a result of new information, future developments or otherwise.
Additional Information About the Acquisition and Where to Find It
A meeting of the stockholders of AMS will be announced soon to obtain stockholder approval of the
proposed transaction. AMS intends to file with the Securities and Exchange Commission (SEC) a proxy
statement and other relevant documents in connection with the proposed transaction. Investors of
AMS are urged to read the definitive proxy statement and other relevant materials when they become
available because they will contain important information about AMS, Endo and the proposed
transaction. Investors may obtain a free copy of these materials (when they are available) and
other documents filed by AMS with the SEC at the SECs website at www.sec.gov, at AMSs website at
www.AmericanMedicalSystems.com or by sending a
written request to American Medical Systems Holdings, Inc., 10700 Bren Road West, Minnetonka,
Minnesota, 55343, attention: Corporate Secretary.
AMS and its directors, executive officers and certain other members of management and employees may
be deemed to be participants in soliciting proxies from its stockholders in favor of the proposed
merger. Information regarding the persons who may, under the rules of the SEC, be considered to be
participants in the solicitation of AMS stockholders in connection with the proposed transaction
will be set forth in AMS proxy statement for its stockholders meeting. Additional information
regarding these individuals and any interest they have in the proposed transaction will be set
forth in the definitive proxy statement when it is filed with the SEC.
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