UPDATE, 11/6/13, 2:05 p.m. EST: The names of the attorneys from Davies Ward Phillips & Vineberg working on the deal have been added to this article’s eleventh and twelfth paragraphs.

Endo Health Solutions said Tuesday it has agreed to pay $1.6 billion in cash and stock to acquire Canadian pharmaceuticals company Paladin Labs.

Skadden, Arps, Slate, Meagher & Flom and Torys are advising Endo on the deal, while Davies Ward Phillips & Vineberg is representing Paladin.

If completed, the acquisition will allow Chadds Ford, Pa.–based Endo to expand both its specialty drugs portfolio and its geographic presence at a time when the company is facing increased competition from generic drug makers. Endo makes a range of branded and generic drugs, most of them used to treat pain, including Percocet and Percodan. Reuters notes that Endo has seen its sales slip recently amid the loss of patent exclusivity on its Lidoderm pain patch and heightened competition for another of its painkiller, Opana, from generic rivals.

In announcing the deal, the companies said the Paladin acquisition will give Endo access to more than 60 other drugs already available to the public—including treatments for ADHD, pain, urology and allergies—as well as a range of products ready to hit the market within the next year.

Under the terms of the deal, a newly formed holding company based in Ireland will acquire both Endo and Paladin in a tax-free process known as a corporate inversion. Paladin shareholders are to receive 1.611 shares of the new company and $1.16 in cash for each of their Paladin shares. The deal values Paladin at roughly $73.70 per share—a premium of 20 percent over the target’s Monday closing price.

Paladin shareholders will also receive one share in a newly formed Canadian company for each of their Paladin shares. The new company, Knight Therapeutics, will be spun off from Paladin as a holding company for the drug Impavido, a treatment for the parasitic disease leishmaniasis.

The transaction is the latest example of companies opting to reincorporate overseas in countries such as the Netherlands and Ireland that offer generous tax breaks. In crafting the deal as a corporate inversion, Endo is following the lead of fellow pharmaceutical company Perrigo, which took advantage of the technique to reincorporate in Ireland when it bought Dublin-based Elan for $6.7 billion in July.

The Skadden team advising Endo includes New York–based M&A partners Eileen Nugent and Brandon Van Dyke. Tax partner Paul Oosterhuis, banking partner Steven Messina, corporate finance partner Stacy Kanter, executive compensation and benefits partners Regina Olshan and Erica Schohn, corporate finance counsel Adam Waitman, health care enforcement counsel Maya Florence and M&A associate C. Michael Chitwood are also advising.

The Am Law Daily named Skadden’s Nugent a “Dealmaker of the Week” in 2010 for her work advising Endo on its $1.2 billion purchase of generic drug company Qualitest Pharmaceuticals. (As we have previously reported, Nugent has been working with Endo since it split off from DuPont Merck in 1997.) The firm’s past work for Endo also includes advising on the company’s $2.9 billion acquisition of American Medical Systems in 2011. Caroline Manogue, a former Skadden M&A associate who left the firm to join the company in 2000, is Endo’s chief legal officer.

Torys is acting as Canadian counsel to Endo on the matter. The firm’s team includes Toronto-based M&A partner Sharon Geraghty and infrastructure and energy partner Krista Hill, as well as securities partner Glen Johnson, tax partner Corrado Cardarelli, tax counsel Andrew Silverman, competition partner Dany Assaf, debt finance partner Tom Zverina, employment partner Mitch Frazer, intellectual property partner Eileen McMahon, technology and life sciences partner Cheryl Reicin, research partner Wilfred Estey and litigation partners Linda Plumpton and Andrew Gray. The Torys associates working on the deal are Miranda Callaghan, Catherine De Giusti, Tyson Dyck, Arezou Farivar, Konata Lake, Teresa Reguly and Thomas Stevenson.

Davies Ward’s previous work for Paladin includes advising on the company’s 2011 purchase of Montreal-based drug company Labopharm for roughly $20 million. The firm’s team advising Paladin on its sale to Endo includes Montreal-based M&A partner Hillel Rosen as well as a capital markets team featuring partners Neil Kravitz, Elliot Greenstone and Gerald Shepherd, and associate Christine Lenis. Competition partners Mark Katz and Charles Tingley are also working on the deal along with tax partners Peter Glicklich, Brian Bloom and Marie-Emmanuelle Vaillancourt.

Davies Ward M&A and capital markets partners Richard Cherney and Olivier Désilets, as well as tax partner Rhonda Rudick, are representing Paladin’s largest shareholders, holding company Joddes Limited and the family of Paladin founder Jonathan Ross Goodman.

Gibson, Dunn & Crutcher corporate partners Barbara Becker and Dennis Friedman, along with associate Brian Kim, are representing Credit Suisse in its role as financial adviser to Paladin on the deal.