Akorn buys rival generic drugmaker for $640 million

USA-based generics drugmaker Akorn (Nasdaq: AKRX) has bought rival generic drugmaker Hi-Tech Pharmacal (Nasdaq: HITK) for $640 million.

Akorn will pay $43.50 per Hi-Tech share, r.epresenting a premium of 23.5% percent to Hi-Tech's closing price on August 26. Akorn shares rose 13% to $18.52 in morning trading yesterday, after touching $18.98 for its biggest intraday increase since May 2010, noted Bloomberg. Hi-Tech increased 23% to $43.40

In a statement, Akorn said it expects to achieve between $15 million and $20 million in annual run-rate synergies within 12 months of closing the deal, which is expected in the fourth quarter. The combined company is expected to have annual revenues in excess of $500 million and the transaction is expected to be accretive to Akorn’s non-Generally Accepted Accounting Practice (GAAP) adjusted earnings per share immediately on closing.