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The ailing private equity market got some relief today. TPG agreed to shell out $1.3 billion for Axcan Pharma (NASADQ: AXCA). There was also debt financing from Bank of America (NYSE: BAC) and HSBC Holdings Plc.
Founded in the early 1980s, Axcan has built a solid franchise in the field of gastroenterology. The company's products help with things like inflammatory bowel disease, cholestatic liver diseases, and irritable bowel syndrome. Their market has been mostly in North America and Europe.
Axcan also reported its full-year results today. Revenues increased 19.4% to $348.9 million and net income was up 68.4% to $1.33 per share.
To continue the growth -- and justify the hefty valuation -- it looks like TPG will get more aggressive in global markets. In light of the company's innovative product line, this strategy should get some traction.
So far in today's trading, Axcan's stock price is up 24% to $22.55.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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