ENDP acquires AMMD

 April 11, 2011

This is an example where a faster than expected close caused convert holders to lose the last coupon.

AMMD agreed to be acquired by ENDP for $30 in cash with an expected closing date in late 3Q2011.

According to the indenture, AMMD has 0 to 20 days after the merger completion to issue a FC company notice. The FC repurchase date will then be 20 business days to 40 calendar days after the notice.

Holders can convert in connection with he make-whole between the merger effective date and the FC purchase date. (20 to 60 days). The next coupon date for AMMD 3.75% converts is 9/15/10 so the dela would have to close after 8/15/10 for holders to get the last coupon.

We belive that the FC repurchase date and FC purchase date refer to the same day and it is used differently here only due to typigraphical error.

Section 4.01 also says holders will get to keep the interest as long as the FC repurchase date is after the record date if we convert after the record date.

Expected close

We expected the close to be 10/10 close because of potential anti-trust risk. ENDP owns Revolix 11% mkt share($20-30MM in revs) and AMMD is the leader with a 65% mkt share; believe there’s a 95% prob. deal gets done & 2/3 prob. of a 2nd request; using 10/1 for timing.

There’s also a divestiture cap of 50MM in revenues but this should be enough for potential overlaps; the overlap exist in procedures for treatment of enlarged prostates(specifically lasers where the combined co. would have a 76% mkt share);

June 20, 2011

ENDP closes the acquisition of American Medical Systems much earlier than the 10/10 date that we expected. Because of the early close, the convert holders will not receive the last coupon.

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