Endo International, a Dublin-based global specialty healthcare company, has delivered an unsolicited proposal to acquire all of the outstanding shares of Chesterbrook, Pa.-based Auxilium Pharmaceuticals for a per share consideration of $28.10, in a cash and stock transaction valued at $2.2 billion.

Endo's proposal represents a premium of 31% to Auxilium's closing price on Sept. 16, and a 40% premium to the average closing price of Auxilium shares for the previous 30 days. The consideration would include an approximately equal mix of cash and Endo stock. Endo intends to fund the transaction through a combination of existing cash on hand and debt financing.

"Endo's proposal would provide Auxilium shareholders a substantial premium and immediate cash value for their investment in Auxilium, as well as the opportunity to participate in the upside potential of a leading global specialty healthcare company," said Rajiv De Silva, president and CEO of Endo. "In light of the highly complementary nature of our two companies' commercial portfolios, the growth potential of Auxilium's Xiaflex and the significant synergy opportunities, we believe this compelling strategic combination would result in and create benefits for both Endo and Auxilium shareholders, as well as for patients, customers and employees."                

"This transaction is well aligned with Endo's strategy to pursue accretive, value creating organic growth opportunities," said De Silva. "We expect that Endo's leading presence in men's health, combined with our R&D capabilities and considerable financial resources will accelerate the growth of Xiaflex and Auxilium's other products, enhancing the value of the combined company's portfolio. Endo stands ready to engage immediately with Auxilium, complete our confirmatory diligence, negotiate a definitive agreement and complete this exciting transaction."

Auxilium's 12 FDA-approved products in urology, orthopedic and other areas complement the men's health and pain products in Endo's pharmaceuticals portfolio. Endo expects to drive increased adoption and enhance the performance of Auxilium's Xiaflex, accelerate development of the product in potential new indications and optimize the broader portfolio of products at Auxilium. The combined company will be well positioned to drive organic growth and to capitalize on additional future strategic M&A opportunities.

Shareholders of the combined company are expected to benefit from significant synergy opportunities given the complementary nature of the companies' product portfolios and geographic locations. These synergies would be in addition to the $75 million reduction in annual operating expenses announced in Auxilium’s new corporate restructuring initiative.

Auxilium announced its restructuring Sept. 9, which includes reducing headcount by approximately 30%, the majority of which will be immediate; realigning the commercial organization from three to two sales forces; focusing its R&D efforts on the efficient development of near-term value programs; and improving manufacturing efficiency and enhancing inventory management. It anticipates substantial completion of the restructuring by the end of 2014. In 2014, Auxilium expects to record certain charges totaling up to $20 million, primarily resulting from severance and contract-related expenses.