Akorn To Buy Hi-Tech Pharmacal For $640 Mln - Quick Facts

(RTTNews) - Akorn, Inc. (AKRX), a generic pharmaceutical company, has reached a definitive agreement to acquire Hi-Tech Pharmacal Co., Inc. (HITK) for $640 million cash. Hi-Tech is a specialty pharmaceutical company developing, manufacturing and marketing generic and branded prescription and over-the-counter products.

Pursuant to the deal, Akorn would pay $640 million cash, or $43.50 per share, representing a 23.5% premium over the closing price on August 26. Akorn expects to achieve between $15 million and $20 million in annual run-rate synergies within 12 months of close. The combined company is expected to have annual revenues in excess of $500 million and the transaction may be accretive to Akorn's non-GAAP adjusted earnings per share immediately upon closing.

Assuming the transaction occurred on January 1, 2013 and assuming the full realization of synergies, the acquisition would have been about 40% accretive to Akorn's expected 2013 non-GAAP adjusted earnings per share.

Raj Rai, Akorn's Chief Executive, commented, "The acquisition of Hi-Tech will also add branded OTC products in the categories of cough & cold, nasals, and topicals to Akorn's existing TheraTears® brand of eye care products. We also plan to capitalize on the manufacturing capabilities of Hi-Tech to further expand our presence in the private label OTC business."

The transaction is expected to be accretive to non-GAAP earnings immediately upon closing, before synergies. Assuming the transaction occurred on January 1, 2013 and assuming the full realization of synergies, the acquisition would have been approximately 40% accretive to Akorn's expected 2013 non-GAAP adjusted earnings per share.