A local manufacturer of generic over-the-counter medicine is expanding from pills to liquids by purchasing a South Carolina drugmaker, in a deal to be announced Monday.
PL Developments of Westbury has reached agreement to buy Aaron Industries of Clinton, S.C., for an undisclosed amount, officials said.
The combined company would have sales of more than $400 million per year, operations in four states and 1,100 workers.
The deal, which is subject to Federal Trade Commission approval, is expected to close this month.
Both businesses produce generic drugs for treating colds, allergies, pain, motion sickness, digestive ailments and sleeping problems. The remedies are sold under the store brands of major retail chains such as Walmart, Target, CVS, Walgreens, Costco and Family Dollar.
Purchasing Aaron gives PL Developments, also called PLD, a line of liquid medicines, hydrogen peroxide and first-aid items. PLD currently doesn't sell drugs in liquid form but only as pills, tablets and capsules.
"This transaction will increase our shelf space" at stores, said PLD chief executive Mitch Singer.
PLD's sales are more than $200 million a year, or about 65 percent of the projected sales of the combined companies. PLD employs 650 people; most of them work at a factory in Westbury and warehouses in Westbury and Farmingdale.
Purchase eyed for a while
Singer, who started PLD in 1988, said he and his family had been considering the Aaron purchase for a couple of years. Talks intensified in July, and an agreement was reached last month.
Singer's oldest son, Evan, executive vice president for corporate development, said the acquisition improves PLD's position in the marketplace.
Other local businesses compete in the same arena, including Contract Pharmacal Corp. and LNK International, both of Hauppauge.
Advantage with retailers
"This makes us more relevant" to retailers, because consumers already spend more than $1 billion per year on PLD and Aaron products, Evan R. Singer said.
Generic drugs have become increasingly popular, both among consumers looking to reduce health care costs and stores wanting higher profits. This trend is partially responsible for a building boom by local drugmakers. Twelve have announced expansion plans since 2010 that total $387 million and more than 2,000 new jobs.
Asked if Aaron's plants would close, Evan Singer said, "The plan is to keep the current facilities network intact . . . We plan to invest heavily in infrastructure, to make improvements."
Singer's brother, Adam, infrastructure and projects vice president, said Aaron's factories and warehouses in South Carolina and California, combined with PLD's in Nassau County and Florida, will create a national distribution system. He said a Midwest operation may be added, "because delivering products in less than two days is very important."
Linda Singer, the CEO's wife, serves as executive vice president for creative services.
Aaron chief executive James L. Medford called PLD the "ideal partner to take us to the next level."
Aaron employs 450 people, primarily in California. Its majority owner, the private equity firm Stephens Capital Partners and J.P. Morgan Chase & Co., financed the sale.
PL DEVELOPMENTS BULKS UP
How the local drugmaker will stack up after its purchase of a South Carolina-based company.
Annual sales: More than $400 million
Employees: 1,100 (575 on Long Island)
Factories: One each in Westbury; Miami; Clinton, S.C.; and Lynwood, Calif.
Products: Over-the-counter generic drugs, in tablet and liquid form, sold under store brand names found at Walmart, Target, CVS, Walgreens, Costco, Family Dollar and others
Sources: PL Developments, Aaron Industries, Newsday research