Endo to buy American Medical Systems: The growth is in your pants

HedgeFundLIVE.com — This morning, before the market opened, Endo Pharmaceuticals Holdings (ENDP) announced its intention to acquire American Medical Systems (AMMD) for $30 in cash, an amount almost 35% above AMMD’s closing price on Friday.  The acquisition will cost ENDP $2.9B including the assumption of $312m in AMMD debt, Endo says they already have committed financing in place.  On a pro-forma basis, Endo says that the deal will be immediately accretive, add $0.60 to EPS in 2012, and $0.80 in 2013.  On a GAAP basis the deal will be accretive in 2013, the same year they expect to achieve $50m in synergies through SG&A and manufacturing efficiencies, as well as procurement savings.  Overall, it looks like the market applauds the deal with AMMD and ENDP stock finishing up on the day (although ENDP did finish well off its highs and was negative for some part of the day).

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