Pennsylvania Drugmaker Buys HealthTronics

Endo Pharmaceuticals Holdings Inc. has shelled out more than a quarter of a billion dollars to diversify its product offerings and become a market leader in pelvic health.

The Chadds Ford, Pa.-based company (which makes the painkiller Percocet) paid $233 million in cash to buy Healthtronics Inc., a provider of services and products for urologists. The Austin, Texas-based firm is the exclusive distributor of the RevoLix laser, a device used for treating prostate enlargement and performing minimally invasive surgery. Healthtronics distributes the laser on behalf of LISA laser, a German manufacturer.

Endo executives said the acquisition would expand the company’s product and services base as well as tap into the U.S. market for urological devices, valued last year at nearly $2.3 billion.

“Beyond diversifying our revenue base, the acquisition of HealthTronics will further position Endo as a preferred healthcare provider of multiple medical solutions and delivery mechanisms that help improve patient outcomes in the field of urology,” said David Holveck, Endo’s president and CEO. “This acquisition will elevate Endo from a pharmaceutical company to a diversified partner to physicians and payers in the treatment and diagnosis of urological and pain-related conditions.”

HealthTronics’ president said the merger would help his firm improve patient care.

“We believe this transaction will achieve significant value for our shareholders and going forward enables us to expand our offerings as a leading provider of urological products and services,” noted James S.B. Whittenburg, Healthtronics’ president and CEO. “Together with Endo we will be better positioned to bring services and technologies that both improve patient care and enhance physician practice economics.”

Under the terms of the merger agreement, Endo will commence a tender offer to purchase all outstanding shares of HealthTronics common stock for $4.85 per share. Endo also will assume about $35 million in HealthTronics debt.

The tender offer will remain open until July 1, subject to extension under certain circumstances. The transaction has been approved by both companies’ boards of directors.

Once the purchase is completed, HealthTronics will operate as a wholly owned subsidiary of Endo Pharmaceuticals.