(AP) — The generic drug maker Par Pharmaceutical Cos. has agreed to be acquired for about $1.84 billion in cash by an affiliate of private investment firm TPG. The chairman and CEO of Par Pharmaceutical, Patrick G. LePore, said the offer — a 37 percent premium to Friday's closing price — was compelling and that TPG's "substantial resources and healthcare experience will enable Par to continue to invest in its future long-term growth."
TPG will pay $50 per share. With about 36.5 million shares outstanding, according to FactSet, that values the deal at about $1.84 billion. The companies put the total value of the deal at $1.9 billion. Par's stock jumped $13.86, or 37.9 percent, to $50.44 in morning trading on Monday after rising as high as $52.33 earlier in the session.
"The company is positioned to benefit from the strong macro trends of a greater focus on cost effective healthcare solutions and the increasing demands from an aging population," Todd Sisitsky, a partner at TPG, said in a statement. TPG is no stranger to buyouts. Last week it was reported that the firm is potentially interested in an American Airlines deal. Par, based in Woodcliff Lake, N.J., said that its board unanimously approved the buyout. It may seek out third-party proposals through Aug. 24.
The acquisition, which is not subject to a financing condition, needs the approval of a majority of Par's outstanding stock. In May, Par reported a first-quarter loss as it set aside $45 million to cover an expected legal settlement related to its anorexia and malnutrition treatment Megace ES. But its adjusted earnings and revenue results topped Wall Street's expectations.
If a superior proposal is not received, the transaction is expected to close before year's end.