Niche pharmaceutical company Akorn, Inc. (AKRX) said Tuesday morning that it has agreed to pay $640 million in cash, or $43.50 per share, to acquire Hi-Tech Pharmacal Co., Inc. (HITK) .  The acquisition price represents a 23.5-percent premium to the closing price of Hi-Tech on Monday.

The move strengthens Akorn's eye drug offerings while also extending the company's product line outside of multisource and branded pharmaceuticals largely focused on sterile ophthalmic and injectibles.  Hi-Tech develops, manufactures and markets generic and branded prescription and over-the-counter products, with a specialization in hard-to-manufacture liquid and semi-solid dosage forms. 

Hi-Tech also makes topical ointments, nasal sprays, otics, sterile ophthalmics and sterile ointment and gels products.

The new Akorn is expected to have annual sales in excess of $500 million with the acquisition anticipated to be immediately accretive to adjusted earnings per share upon closing.  Annual run-rate synergies between $15 million and $20 million are expected within 12 months of closing.

Hi-Tech had $100.6 million in cash and cash equivalents as of April 30.

“This is a transformative event for our company,” said Raj Rai, chief executive at Akorn.  “The acquisition of Hi-Tech will also add branded OTC products in the categories of cough & cold, nasals, and topicals to Akorn’s existing TheraTears® brand of eye care products,” Rai added.

Akorn’s pipeline, which includes 57 abbreviated new drug applications filed with the FDA, also gets a boost, adding 18 ANDAs that Hi-Tech has filed with the FDA.  Akorn estimates that the combined annual addressable IMS market size of all the ANDAs to be about $8.2 billion.  In January, Akorn said that it expects bringing a total of 39 branded or generic drugs to the market between 2013 and 2015.

Generic drug makers have been looking to strike while the iron is hot as many big pharmas are still dealing with a patent cliff that has pressured sales and profits as generic drugs steal market share.  A few weeks ago, Michigan-based generic drug maker Perrigo Co. (PRGO) said that it was spending $8.6 billion to buy Ireland’s Elan Corporation (ELN) .

Shares of Akorn swelled near all-time highs earlier this month when the Lake Forest, Illinois-based company reported second-quarter results that beat Wall Street expectations.  Consolidated revenue hit a record $77.0 million, ahead of analyst expectations of $75.6 million.  Adjusted profits totaled 14 cents per share, beating street predictions of 12 cents per share.

For the year, Akorn sees revenue between $305 million and $315 million and profits in the range of 53 cents to 55 cents.

With today’s news, the all-time high mark has fallen for (AKRX) .  Shares have leapt ahead 13 percent to $18.60 in early morning trading.  Shares of HITK have risen 23 percent to near the acquisition price, also representing a record high.