Dublin-based Endo to acquire DAVA in €423m deal

Dublin headquartered pharmaceutical group Endo International is to acquire New Jersey based DAVA Pharmaceuticals, a privately-held company specialising in marketed, pre-launch and pipeline generic pharmaceuticals, for $575 million (€423mn) in cash. Additional cash consideration of up to $25 million may also apply, but is contingent on the achievement of certain sales milestones.

In a statement, Endo, which develops, manufactures, markets, and distributes quality branded pharmaceutical, generic and device products, said that the acquisition enhances its commercialisation and development platform and the deal is expected to be immediately accretive to Endo’s 2014 adjusted earnings per share (EPS).

“The acquisition of DAVA is another step in our pursuit of accretive and strategic external growth opportunities where we see a clear path to meaningful upside and synergies,” said Rajiv De Silva, president and CEO of Endo. “DAVA is well-positioned for continued strong and highly predictable financial performance with its existing commercial portfolio and attractive near-term pipeline, and is a natural fit for our generics business. With Endo’s sharp focus, lean operating model and improved execution within our core businesses, strategic acquisitions will continue to play a key role in maximising our growth potential and cash flow to drive future value for Endo shareholders.”

DAVA operates a highly-profitable generics franchise with 2013 revenue of approximately $131 million and 2013 adjusted EBITDA of approximately $100 million. DAVA’s strategically-focused generics portfolio includes 13 on-market products in a variety of therapeutic areas.

It’s the latest in a line of “tax inversion” associated deals, whereby pharma giants acquire an operation in a low tax domicile - such as Ireland - to reduce corporate tax rates and make it easier to spend cash currently held overseas without having it taxed in the United States.

Last year Endo acquired the Dublin based Canadian drug maker Paladin, subseuqently moving its headquarters to Dublin.