Endo plans term loans and bonds for purchase of American Medical

By Sara Rosenberg

New York, April 11 - Endo Pharmaceuticals has received a commitment for new term loans and bonds to help fund its acquisition of American Medical Systems, company officials said in a conference call on Monday.

The interest rate on the debt is about 5% on a blended average rate, officials remarked.

Morgan Stanley and Bank of America Merrill Lynch are leading the debt financing.

Endo is buying American Medical for $30 per share, or $2.9 billion in cash, which includes the assumption and repayment of $312 million of debt.

Other funds for the transaction will come from "a modest amount" of cash on hand, officials continued.

On a 2011 pro forma basis, the combined company would have had revenues of about $3 billion and EBITDA of about $1 billion.

The transaction is also expected to be accretive to adjusted diluted earnings per share by $0.60 in 2012 and by $0.80 in 2013.

Closing is expected late in the third quarter, subject to customary conditions, regulatory approval and American Medical stockholder approval.

"Our first focus will be to delever our balance sheet. We've talked about a target of being 2 to 2½ times levered on average and that is an area I like quite a lot," an official said in the call.

Officials went on to say that the term loans being put in place allow for more rapid deleveraging.

Endo is a Chadds Ford, Pa.-based specialty health care company focused on branded products and specialty generics. American Medical is a Minnetonka, Minn.-based provider of devices and therapies for male and female pelvic health.

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