Akorn, Inc. (NASDAQ:AKRX) announced earlier today that it had agreed to acquire VPI Holdings Corp., the parent company of VersaPharm Incorporated, for $440 million in cash. The all-cash deal is not expected be finalized until the the third quarter of this year.

Akorn Inc logo

Given synergies, the VersaPharm acquisition is expected to result in at least an additional $90 to $100 million in annual revenues for Akorn, Inc. (NASDAQ:AKRX) and $0.10 to $0.12 in earnings per share, not including costs of new pipeline launches, deal amortization or other acquisition-related expenses.

After due deliberation, Akorn, Inc. (NASDAQ:AKRX) hired J.P. Morgan Securities LLC to act as a financial advisor and Kirkland & Ellis LLP to act as a legal advisor. BMO Capital Markets Corp. is the financial advisor and Kelley Drye & Warren LLP is the legal advisor to VersaPharm and Tailwind Capital for this transaction.

VersaPharm details

VersaPharm, a private multi-source prescription pharmaceutical developer, has a line of products in the therapeutic categories of dermatology, tuberculosis and hemophilia. The company has a strong pipeline of more than 20 products that target a potential market share of over $700 million. VersaPharm’s has extensive experience in developing topical products that dovetails well with the manufacturing platform Akorn, Inc. (NASDAQ:AKRX) recently acquired with the Hi-Tech Pharmacal merger.

Statement from Akorn and VersaPharm

Raj Rai, Akorn’s CEO, offered his perspective on the deal, “This acquisition is a highly strategic fit with the recently acquired Hi-Tech platform as well as Akorn, Inc. (NASDAQ:AKRX)’s focus on niche dosage forms. Our acquisition strategy will have resulted in doubling our revenues and product portfolio in a short period of time. 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.”

VersaPharm’s CEO, Kevin Connelly, spoke positively about the acquisition, “With the support of our equity partner, Tailwind Capital, and through the efforts of our dedicated employees, VersaPharm has generated exceptional growth since we acquired the Company in 2007. Akorn, Inc. (NASDAQ:AKRX) is a great fit for VersaPharm to realize the full potential of our dermatology-focused product pipeline and continue to meet the needs of our customers. We look forward to working with Raj Rai and his team to support the success of the combined entity.”