Endo Pharmaceuticals signs agreement to acquire HealthTronics

Endo PharmaceuticalsMay 6 2010

• HealthTronics is a Leading Provider of Urologic Products and Services
• All Cash Transaction with Purchase Price of $223 Million Plus Assumed Net Debt
• Acquisition Accretive to 2010 Adjusted Earnings Per Share
• Diversifies Endo Revenue Stream and Product Offering in Urology

Continuing to diversify, move into new growth areas beyond pharmaceuticals, and strengthen its commitment to improved patient outcomes in urology, Endo Pharmaceuticals (Nasdaq: ENDP) today announced that it has signed an agreement to acquire HealthTronics, Inc. (Nasdaq: HTRN), a leading U.S. provider of urological products and services. The acquisition expands Endo's product offerings to urologists with the addition of lithotripsy, benign prostate hyperplasia (BPH) and prostate cancer therapies, as well as anatomical pathology services for the detection and diagnosis of cancer and other conditions.

"Beyond diversifying our revenue base, the acquisition of HealthTronics further positions Endo as a preferred healthcare provider of multiple medical solutions and delivery mechanisms that help improve patient outcomes in the field of Urology," said Dave Holveck, president and CEO of Endo.  "This strategic acquisition immediately elevates Endo from a pharmaceutical company to a diversified partner to physicians and payers in the treatment and diagnosis of urological and pain-related conditions.  This deal will also enhance our ability to deliver long-term, sustainable growth for our shareholders in an evolving healthcare environment."

Under the terms of the merger agreement, Endo will commence an all cash tender offer to acquire 100 percent of the outstanding shares of HealthTronics for approximately $223 million or $4.85 cash per HealthTronics share plus the assumption of approximately $35 million in net debt. HealthTronics shares that are not acquired in the tender offer will be purchased at the same price in a second-step merger.  HealthTronics will operate as a wholly-owned subsidiary of Endo.  The transaction has been approved by the boards of directors of both companies.

HealthTronics president and CEO James S.B. Whittenburg stated, "This transaction achieves significant value for our shareholders and going forward, enables us to expand our offerings as a leading provider of urological products and services.  Together with Endo, we are better positioned to fulfill our mission of bringing services and technology that both improve patient care and enhance physician practice economics thus enhancing the value of the channel HealthTronics has established with leading urologists."

The consummation of the tender offer is subject to the satisfaction or waiver (in accordance with the terms of the merger agreement) of certain conditions, including: (i) a minimum of the majority of outstanding HealthTronics shares on a fully diluted basis having been tendered into the offer, (ii) the expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvements Act, (iii) the absence of any law prohibiting the offer or the merger or any litigation or governmental action challenging or seeking to prohibit the offer or the merger, (iv) there not having been a material adverse change with respect to HealthTronics, and (v) other customary conditions. The tender offer is not subject to a financing condition.

In addition, Mr. Whittenburg and other key HealthTronics executives have entered into employment agreements, to be effective upon closing of the offer, providing for their continued employment with the combined company following the transaction.  Mr. Whittenburg has been named company group president and will continue to lead HealthTronics.