Private Equity Drug Companies

Drug Companies Are Likely Targets for Private Equity

Several large drug companies are drawing attention from private equity firms.  Endo Pharmaceuticals Holdings Inc., King Pharmaceuticals Inc., and LifePoint Hospitals Inc. are seen as viable buyout targets.  Each drug company has a market capitalization of $1 billion to $3 billion, have low debt, high cash inflows, and shares are reasonably priced–if not undervalued.  Private equity firms are increasingly looking to the healthcare industry as a profitable area for buyout deals.  Here is more on the three drug companies from Bloomberg:

[Buyout firms] see opportunity in health care, where companies are trimming costs and spinning off units in response to the economy, even as the industry stands to gain from U.S. legislation that may expand care to more than 30 million Americans, said Karen Bechtel of the Carlyle Group, the world’s second-largest equity firm.

“The combination of health-care reform and the recession has forced companies to be more careful about running their businesses,” said Bechtel, who heads the Washington firm’s health-care unit, in a telephone interview. “That’s driving activity, and it will accelerate.”

King, based in Bristol, Tennessee, rose 34 cents, or 2.9 percent, to $12.14 at 9:46 a.m. in New York Stock Exchange composite trading. LifePoint, of Brentwood, Tennessee, climbed 82 cents, or 2.8 percent, to $30.21 in Nasdaq Stock Market composite trading and Endo, based in Chadds Ford, Pennsylvania, gained 50 cents, or 2.3 percent, to $22.70.

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Tags: private equity drug companies, drug companies, private equity firms, buyouts, investments, Endo Pharmaceuticals Holdings Inc., King Pharmaceuticals Inc., LifePoint Hospitals Inc.

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