Akorn entered a definitive agreement to acquire Hi-Tech Pharmacal for $640 million in cash, or $43.50 per share, the companies reported Tuesday. Akorn noted that the deal “strengthens [its] current position as the third largest US generic ophthalmic player,” with CEO Raj Rai, calling the purchase “a transformative event” for the company.

Rai remarked that Hi-Tech’s portfolio of products “is a great strategic fit to our currently marketed products as it diversifies our offering to our retail customers beyond ophthalmics to other niche dosage forms such as oral liquids, topical creams and ointments, nasal sprays and otics.” Akorn noted that Hi-Tech, which markets generic and branded prescription and over-the-counter products, specialises in difficult to manufacture liquid and semi-solid dosage forms.

Akorn said the deal price represents a 23.5 percent premium over Hi-Tech’s closing share price on August 26, adding that the transaction is expected to close in the first quarter of 2014. According to Akorn, the combined company will have combined annual revenues of more than $500 million, with the acquisition expected to lead to cost savings of between $15 million and $20 million within 12 months of closing. Akorn added that it currently has 57 abbreviated new drug applications filed with the FDA, while Hi-Tech has 18 such filings with the agency.