Hi-Tech Pharmacal Acquires ECR Pharma

Hi-Tech Pharmacal Co., Inc. (NASDAQ: HITK) announced today the signing of a definitive agreement under which Hi-Tech acquired the assets of ECR Pharmaceuticals, a privately held branded specialty pharmaceutical company for $5.1 million in an all-cash transaction, which will be paid over an eight month period. Additionally, Hi-Tech may pay up to $4.0 million in performance incentives tied to future ECR product sales and profits. Under the terms of the acquisition Hi-Tech receives rights to ECR’s product line, including branded prescription products for the treatment of allergy, headache and dermatitis/poison ivy. ECR Pharmaceuticals has 45 sales representatives promoting products to physicians and pharmacists in 12 mid-Atlantic and southern states. ECR had net sales of $13.2 million and operating income of $2.0 million in calendar 2008. The company will continue to operate under the name ECR Pharmaceuticals.
“This acquisition allows Hi-Tech to capitalize on ECR’s growing sales, and brings experienced management with a successful track-record developing new products,“ said David Seltzer, President and CEO of Hi-Tech Pharmacal. “The addition of ECR makes Hi-Tech a more diverse and flexible company, as we have an additional outlet to market differentiated products currently in development. We believe that the ECR acquisition will be earnings accretive and cash flow positive in the near term, and contribute to the Company’s long term growth.”
Hi-Tech is a specialty pharmaceutical company developing, manufacturing and marketing generic and branded products. The Company specializes in difficult to manufacture liquid and semi-solid dosage forms and produces a range of sterile ophthalmic, otic and inhalation products. The Company's Health Care Products Division is a leading developer and marketer of branded prescription and OTC products for the diabetes marketplace.