Hi-Tech Pharmacal Co. said Tuesday it was being sold to an Illinois company for $640 million in cash.

The rapidly growing drugmaker, with headquarters in Amityville, identified the buyer as Akorn Inc., also a drugmaker.

Both are public companies with stocks traded on the Nasdaq exchange, and each has annual sales of more than $200 million.

Hi-Tech is best known as the maker of Fluticasone nasal spray, a generic version of Flonase used for allergies and sinus infections. Its popularity helped to make Hi-Tech the third-fastest-growing public company in the United States two years ago, according to Fortune magazine.

Akorn chief executive Raj Rai told stock analysts Tuesday that buying Hi-Tech would make Akorn "a larger and well-diversified generic player." He also lauded Hi-Tech's two factories in Amityville.

Hi-Tech has 447 employees, about 400 locally. Akorn, which produces TheraTears eye medicine and is based in a Chicago suburb, has nearly 1,000 workers, including more than 200 at an Indian subsidiary.

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The transaction is expected to close early next year. The impact on employees wasn't disclosed.

Akorn is paying $43.50 a share for Hi-Tech, or 24 percent more than Hi-Tech's closing price on Monday.

Shares in both companies soared Tuesday after the purchase announcement. Hi-Tech closed up $7.78, or 22 percent, to $42.99 per share. Akorn was up $1.58, or nearly 10 percent, to $18.02 per share.

"Hi-Tech is getting a fair price," said analyst Timothy Chiang, who follows the company for CRT Capital Group in Stamford, Conn.

"While they've had a good run, I don't think they had the critical mass to successfully grow parts of their business . . . The reality is in pharmaceuticals you have to get bigger; everybody is consolidating," he said in an interview.

In a conference call with analysts, Akorn officials estimated the Hi-Tech purchase would create a company with sales of more than $500 million per year.

They also said Hi-Tech has manufacturing capabilities that Akorn lacks, and a planned expansion of Akorn's Somerset, N.J., factory could be shelved because of the deal. Its other plants are in Illinois and India.

Hi-Tech CEO David Seltzer said, "The combined portfolio of marketed products and products in development offer a very unique platform with great growth potential."

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Headquarters: Amityville

Employees: 447; about 400 on LI

Sales: $232M

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Profit: $16M

Products: Fluticasone nasal spray, a generic version of the prescription Flonase; generic cold and flu remedies; brand-name over-the-counter products for diabetes and allergies

History: Hi-Tech is the successor of Success Chemical Co., started in the 1930s in Brooklyn by Reuben Seltzer, grandfather of Hi-Tech CEO David Seltzer

SOURCES: Hi-Tech Pharmacal Co., Newsday research


Hi-Tech sale is LI's 2nd all-cash deal this week

The Hi-Tech Pharmacal acquisition is the second all-cash deal involving a local company in two days.

It's also the biggest sale of a Long Island business to be announced this year, said Richard Peterson of the financial data company S&P Capital IQ in Manhattan.

On Monday, another public company, Globecomm Systems Inc. of Hauppauge, said it was being bought by Manhattan-based private equity firm Wasserstein & Co. for $340 million.

Peterson said Tuesday two deals in two days doesn't mean merger mania has returned. Mergers and acquisitions locally for the first eight months of 2013 totaled $1.84 billion compared with $4.2 billion in the same period last year. The statistic measures transactions for public and private companies.

This week's deals are part of a long-term trend: The number of public companies on Long Island is shrinking. Ten years ago there were more than 80; today there are fewer than 55. -- Joe Ryan and James T. Madore