|Send to printer »|
GEN News Highlights : Aug 27, 2013
Akorn Acquiring Hi-Tech Pharmacal for $640M
Akorn will acquire Hi-Tech Pharmacal for $640 million cash, in a deal designed to strengthen the acquiring company’s position as third-largest seller of generic ophthalmic drugs in the U.S., while broadening its product offerings to include oral liquids, topical creams and ointments, nasal sprays and otics.
The acquisition is subject to customary conditions, including termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Akorn said it anticipates closing the transaction in the first quarter of 2014.
“This is a transformative event for our company. 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,” Raj Rai, Akorn’s CEO, said in a statement.
Rai also said Akorn plans to capitalize on Hi-Tech’s manufacturing capabilities to further expand its presence in producing private-label over-the-counter (OTC) products: “The acquisition of Hi-Tech will also add branded OTC products in the categories of cough and cold, nasals, and topicals to Akorn’s existing TheraTears® brand of eye care products.
Founded in 1982, Hi-Tech specializes in hard-to-manufacture liquid and semi-solid dosage forms of its specialty pharmaceuticals. The company also produces and markets oral solutions and suspensions, as well as topical ointments and creams, nasal sprays, otics, sterile ophthalmics, and sterile ointments and gels. Hi-Tech's core business is its generic sales division, while its ECR Pharmaceuticals unit markets branded prescription drugs, and its healthcare products division develops and markets branded OTC products such as the Diabetic Tussin® line of sugar-free cough and cold medications, as well as pain and allergy treatments.
Hi-Tech is headquartered in Amityville, NY, and has 18 abbreviated new drug applications (ANDAs) filed with the FDA. Akorn, founded in 1971, has 57, and is headquartered in Lake Forest, IL.
Akorn develops, manufactures, and markets multisource and branded pharmaceutical products in ophthalmology, antidotes, anti-infectives, and controlled substances for pain management and anesthesia, both in the U.S. and worldwide.
Akorn said expects to achieve between $15 million and $20 million in annual savings within 12 months of the deal closing “through operating efficiencies,” but did not detail how or where it would cut spending. The combined company is expected to have annual revenues in excess of $500 million.
At $43.50 per share, the acquisition price represents a 23.5% premium over the closing price on August 26. Akorn said it intends to fund the deal through a combination of Hi-Tech cash assumed and about $600 million in term loan borrowings.
To enjoy more articles like this from GEN, click here to subscribe now!
© 2013 Genetic Engineering & Biotechnology News, All Rights Reserved