US-based Akorn has entered into a definitive agreement to acquire VPI Holdings, the parent company of VersaPharm, for $440m in cash.
The privately held developer and marketer of multi-source prescription pharmaceuticals, VersaPharm is focused in the niche therapeutic categories of dermatology, tuberculosis and hemophilia.
VersaPharm has a robust pipeline of over 20 products, including 11 abbreviated new drug applications (ANDAs) filed with the FDA, with an addressable IMS market value of over $700m.
The company’s expertise in developing topical products complements Akorn’s recently acquired manufacturing platform through the merger with Hi-Tech Pharmacal.
Expected to add $90m-$100m in annual revenues, the transaction will be funded by Akorn through around $445m in term loan borrowings. JP Morgan Chase Bank has provided fully committed financing for the deal, which is expected to close in the third quarter of 2014.
Akorn chief executive officer Raj Rai said the acquisition is a highly strategic fit with the recently acquired Hi-Tech platform as well as the company’s focus on niche dosage forms.
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"Our acquisition strategy will have resulted in doubling our revenues and product portfolio in a short period of time," Rai said.
"With this acquisition we have further diversified our portfolio. We are also very excited about VersaPharm’s robust pipeline that will further accelerate our company’s long-term growth opportunities."
The transaction will be subject to customary conditions, including termination of the waiting period under the provisions of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.
VersaPharm chief executive officer Kevin Connelly said with the support of the company’s equity partner, Tailwind Capital, and through the efforts of its dedicated employees, VersaPharm has generated exceptional growth since its acquisition in 2007.
"Akorn is a great fit for VersaPharm to realise the full potential of our dermatology-focused product pipeline and continue to meet the needs of our customers," Connelly said.
"We look forward to working with Raj Rai and his team to support the success of the combined entity."