Shire (SHPG) Has Room for More Acquisitions Following ViroPharma (VPHM) Deal - Analyst

November 11, 2013 10:35 AM EST Send to a Friend
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Price: $235.63 -2.6%

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Shire plc (Nasdaq: SHPG) is trading positive Monday following an earlier announcement that it will acquire ViroPharma (Nasdaq: VPHM) in a $4.2 billion deal.

Analyst firm Bernstein thinks that the size of the deal isn't particularly large and would leave room for Shire to make further acquisitions.

Bernstein sees Shire with FY14 net debt-to-EBITDA (leverage) at 1.2 times, while the company has an internal estimate of 1.5 times. The deal should lift FY14 EPS by 3 percent, FY15 by 9 percent, and 10 percent gains should be see thereafter, Bernstein noted.

Shire's CEO, Angus Russell, said the deal would allow the company to raise leverage to 3.0 times, allowing for more debt to be raised.

Shares of Shire are up 1.4 percent, but off of earlier gains.

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