Perrigo Company announced that it has closed the acquisition of Paddock Laboratories, Inc. (Paddock), a privately-held, Minneapolis-based pharmaceutical manufacturer of generic Rx pharmaceuticals and OTC specialty products for approximately $540 million in cash.

Perrigo Chairman and CEO Joseph C Papa stated, “We are very pleased to welcome the Paddock team to the Perrigo family. This acquisition is another important step forward in executing Perrigo’s strategy to expand our specialty portfolio of generic Rx products. It adds incremental scale, as well as excellent development and manufacturing capabilities across a spectrum of niche dosage forms. It solidifies Perrigo’s leading position in the extended topical space and strengthens our ability to offer new products into the market. Paddock has a proven record for quality manufacturing with great customer service.”

As previously highlighted, Perrigo expects to receive a significant tax benefit generated from the acquisition of Paddock’s assets. The net present value of the tax benefit is estimated to be $ 95 million. Inclusive of the tax benefit, the total consideration for the acquisition is approximately $ 445 million.

As a result of the closing of the acquisition, Watson Pharmaceuticals, Inc. will acquire a portfolio of generic pharmaceutical products from Perrigo that are being divested as a result of the FTC review. The total revenues from marketed products represent less than 0.2% of the combined entities’ total FY11 revenues, and none of the revenues from the divested pipeline product were included in Perrigo’s projections for the next few fiscal years. Terms were not disclosed.

Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes OTC and generic prescription (Rx) pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients (API) and pharmaceutical and medical diagnostic products.