ENDP Agrees to Sell HealthTronics Unit - Analyst Blog


In a bid to optimize its resources and maximize long-term growth potential Endo Health Solutions ( ENDP ) inked a deal to sell its struggling HealthTronics division (formerly sevices) to an investment firm, Altaris Capital Partners, for up to $130 million. Endo Health expects the deal to close by Mar 31, 2014.

The total value of the transaction includes an upfront payment to Endo Health of $85 million in cash. Endo Health is also eligible to receive up to $45 million depending on the performance of the HealthTronics division. We note that Endo Health had already sold two sub-groups - image guided radiation therapy and anatomical pathology - of the HealthTronics unit for a total of $25 million.

We remind investors that Endo Health had announced its intention to divest its HealthTronics business, which provides urological services, products and support systems to multiple healthcare providers in the U.S., in Jun 2013. The offerings of the division were added to Endo Health's portfolio following its acquisition of HealthTronics in 2010. The other three divisions at Endo Health are Endo Pharmaceuticals (formerly branded pharmaceuticals), Qualitest (formerly generics) and American Medical Systems (formerly devices).

We note that the below-par sales of the HealthTronics unit is not the only concern currently facing Endo Health. The threat of genericization looms large over Endo Health. Endo Health's revenues in the third quarter of 2013 declined on a year-over-year basis due to lower sales of painkillers Opana ER and Lidoderm due to generic competition from companies like Actavis ( ACT ).

Endo Health carries a Zacks Rank #3 (Hold). Better ranked stocks include Forest Laboratories Inc. ( FRX ) and Jazz Pharmaceuticals ( JAZZ ). While Forest Laboratories holds a Zacks Rank #1 (Strong Buy), Jazz Pharmaceuticals holds a Zacks Rank #2 (Buy).

ACTAVIS PLC (ACT): Free Stock Analysis Report

ENDO PHARMACEUT (ENDP): Free Stock Analysis Report

FOREST LABS A (FRX): Free Stock Analysis Report

JAZZ PHARMACEUT (JAZZ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ACT , ENDP , FRX , JAZZ



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