TPG Strikes Drugmaker Deal

(Reuters) – Private equity firm TPG said on Monday it would acquire U.S.-based Par Pharmaceutical Cos Inc for $1.9 billion in the latest acquisition in the generic drug industry.

The $50-a-share deal represents a nearly 37 percent premium over Par’s closing price on Friday.
Under terms of the deal, Par may seek superior bids from third parties through August 24, and the company said the board will “actively” solicit proposals during that time. If no better arrangement is found, the TPG deal is expected to close this year.

Par shares rose to $50.65 after the deal was announced, just above the offer price.

Par ranked as the sixth-largest generic drugmaker by 2011 sales, according to pharmaceutical information company IMS Health. It has been speculated as a takeover candidate for companies wanting to expand their presence in the U.S. generics market.

The company, which posted 2011 revenue of $926 million, also sells niche brand medicines through its Strativa division.

The acquisition of Par comes after larger U.S. rival Watson Pharmaceuticals Inc agreed in April to buy Actavis Group for at least $5.6 billion to cement its status as one of the world’s largest generic drug companies.

JP Morgan served as financial adviser to Par, while Orrick, Herrington & Sutcliffe was legal adviser. TPG’s financial advisers were Bank of America Merrill Lynch, Deutsche Bank Securities and Goldman Sachs, while Ropes & Gray served as legal adviser.

(Reporting by Lewis Krauskopf; Editing by Gerald E. McCormick and Maureen Bavdek)

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