Hi-Tech Pharmacal acquired the assets of Midlothian Laboratories, a generic pharmaceutical company, for $5 million in an all-cash transaction. Additionally, Hi-Tech will pay approximately $0.9 million for inventory and potentially up to $1.0 million in performance incentives tied to future Midlothian product sales and the approval of an ANDA.
Under the terms of the acquisition, Hi-Tech receives rights to Midlothian's current product line, which consists of prescription nutritional supplements (including prenatal vitamins as well as several cough and cold formulations) and future ANDA and nonANDA products that are in development. Midlothian had sales of approximately $5.6 million and pretax income of approximately $0.8 million for calendar 2006.
“This acquisition expands Hi-Tech's product line, broadens our dosage form offerings, brings us into new therapeutic categories, adds to the company's growing pipeline of products, and brings experienced management,” says David Seltzer, president and CEO of Hi-Tech Pharmacal. “We believe that the acquisition will be accretive to earnings and cash flow positive in the first year.”