Hi-Tech Pharmacal signed a definitive agreement to acquire the assets of Midlothian Laboratories for $5.0 million in an all-cash transaction. As per the terms and conditions of the agreement, Hi-Tech would also pay approximately $0.9 million for inventory and potentially up to $1.0 million in performance incentives tied to future Midlothian product sales and approval of an abbreviated new drug application (ANDA).
In accordance with the terms of acquisition Hi-Tech would receive rights to Midlothian's current product line, consisting of prescription nutritional supplements including pre-natal vitamins and several cough and cold formulations, apart from future ANDA and non-ANDA products that are in development.
Midlothian had sales of approximately $5.6 million and pre-tax income of approximately $0.8 million for the calendar year 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," said, 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."
Hi-Tech is a specialty pharmaceutical company developing, manufacturing and marketing generic and branded prescription and over the counter (OTC) products. The company specialises in difficult to manufacture liquid and semi-solid dosage forms and produces a range of sterile ophthalmic, otic and inhalation products.