Following Endo International PLC’s aim to dedicate its resources to its core businesses which is in the pharmaceuticals area, the company decided to sell some of its business. For $1.6 billion, the businesses concerning men’s health and prostate owned by Endo International will be turned over to Boston Scientific Corp.
Premarket trading shows a less than 1 per cent decrease in the shares owned by Endo International, a company based in Dublin. Meanwhile, shares owned by Boston Scientific have increased to 1.2 per cent.
According to a representative from Endo International, the sales between them and Boston Scientific has paved way for the company to focus more on their pharmaceuticals businesses and its core financially. Another $50 million will be paid to Endo as milestone payments based on predicted sales by 2016.
The urology and women’s health department of Boston Scientific will be merged with men’s health and prostate businesses by the American Medical System. The men’s businesses which have delved on finding treatment for erectile dysfunction, inconsistency when urinating and other issues related to urology has generated $400 million last year in sales while the income was revealed to be around $130 million.
Mike Mahoney, Chief Executive of Boston Scientific, shared how after this deal, the annual sales are expected to rise to $1 billion after creating further businesses. Those treatments will be able to complement the existing ones done on the disorders experienced by female gynecology and urology. It also one way for Boston Scientific to gain more diverse product portfolio and be separated from the cardiac devices – products responsible for half the sales made by the company.
Earnings from the deal are expected to be even in the year 2015 while another three cents will be added on every share come 2016. Before 2018 ends, pretax synergies will have risen to $50 million. The deal is expected to be final by the third quarter.
Endo International is reported to be suffering from a decrease of 35 cents per share or $53 million in losses during the fourth quarter. Year prior to that, the company has also experienced a loss of $776 million the entire year, bringing the share to $6.74 each.