Bulletin: Mallinckrodt PLC's Proposed Merger With Endo Inc. Would Improve Its Business Strength; Ratings Not Immediately Affected

This report does not constitute a rating action. NEW YORK (S&P Global Ratings) March 14, 2025--S&P Global Ratings today said that the potential merger of Mallinckrodt PLC (BB-/Stable/--) and Endo Inc. (B+/Stable/--) would improve Mallinckrodt's business strength by combining two moderate-size pharmaceutical companies with both specialty and generic business segments. We anticipate the merger would increase the company's scale, scope, and diversity, though we believe the integration of Endo will increase its operating risk over the near term. We expect the merger will be modestly negative for Mallinckrodt?s financial risk because it will increase its leverage to the 3.0x-3.5x range, from about 2.5x in 2024 (based on gross debt and net of Therakos divestiture), pro forma for its assumption of

...March 14, 2025 This report does not constitute a rating action. NEW YORK (S&P Global Ratings) March 14, 2025--S&P Global Ratings today said that the potential merger of Mallinckrodt PLC (##-/Stable/--) and Endo Inc. (B+/Stable/--) would improve Mallinckrodt's business strength by combining two moderate-size pharmaceutical companies with both specialty and generic business segments. We anticipate the merger would increase the company's scale, scope, and diversity, though we believe the integration of Endo will increase its operating risk over the near term. We expect the merger will be modestly negative for Mallinckrodt's financial risk because it will increase its leverage to the 3.0x-3.5x range, from about 2.5x in 2024 (based on gross debt and net of Therakos divestiture), pro forma for its assumption of Endo's $2.5 billion of debt and associated EBITDA. That said, we don't expect the transaction will pressure our rating on the company, given that our current downside threshold entails...

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