Endo Pharma to buy American Medical in $2.6 billion deal

Representative of the consolidation the pharmaceutical industry is undergoing, Endo Pharmaceuticals Holdings announced Monday that it plans to buy the urology and pelvic health company American Medical Systems for $2.6 billion. The move will serve to drastically expand its medical device business which is an increasingly lucrative industry.

American Medical Systems specializes in the development of devices and therapies for pelvic health, urology and gynecology. It is a heavyweight within its industry and logged sales of nearly $550 million in 2010; according to company executives, nearly 50 percent of its revenue comes from sales of men's urological health products.

The move by Endo to purchase the company fits within its long-term strategy of branching out from its core business of developing pain drugs. Now, the company is looking to expand its generic and medical device divisions with the acquisition. Moreover, the deal will results in cut business costs and a boost in efficiency, according to company executives, as both companies incorporate their supply chains.

Endo plans to close the deal in the third quarter once it has achieved regulatory approval.