(Updates with closing share prices in fifth paragraph.)
Aug. 27 (Bloomberg) -- Akorn Inc., a maker of generic eye- care products, agreed to buy Hi-Tech Pharmacal Co. for $640 million in cash to expand into areas including cold and cough treatments.
Hi-Tech investors will receive $43.50 a share, Lake Forest, Illinois-based Akorn said in a statement today. That’s 24 percent more than yesterday’s closing share price for Hi-Tech.
Akorn, which calls itself the third-biggest U.S. maker of generic eye products, said the acquisition of Amityville, New York-based Hi-Tech will add to earnings as soon as the deal is completed. The combined company will have annual revenue of more than $500 million. Akorn said it plans to fund the acquisition with a combination of Hi-Tech’s cash and about $600 million in loans.
“The portfolio of Hi-Tech products is a great strategic fit to our currently marketed products as it diversifies our offering to our retail customers beyond ophthalmics to other niche dosage forms,” Akorn Chief Executive Officer Raj Rai said in the statement. “We also plan to capitalize on the manufacturing capabilities of Hi-Tech to further expand our presence in the private label OTC business.”
Akorn rose 9.6 percent to $18.02 at 4 p.m. New York time, its biggest one-day increase since November 2011. Hi-Tech increased 22 percent to $42.99.
JPMorgan Chase & Co. was financial adviser and Kirkland & Ellis LLP and Polsinelli PC were legal advisers to Akorn. Nomura Securities International Inc. was financial adviser and Arent Fox LLP and Tashlik Goldwyn Crandell Levy LLP were legal advisers to Hi-Tech.
--Editors: Bruce Rule, Romaine Bostick