Hi-Tech Pharmacal Co., Inc. (NASDAQ:HITK) announced today the signing of a definitive agreement under which Hi-Tech acquired several homeopathic branded nasal spray products including Sinus Buster® and Allergy Buster® from Dynova Laboratories, Inc. for $1.25 million in cash and an additional $1.25 million deposited in an escrow account to pay for certain expenses. Hi-Tech will also pay a royalty on Net Sales for 3 ½ years, or $1.75 million, whichever is reached first. The product line had Net Sales of $3.3 million in 2011 . The brands will be sold through the Company's Health Care Products OTC division.
"With the addition of these products we are well positioned to benefit from the growing trend toward natural, homeopathic treatment options" said David Seltzer, President and CEO of Hi-Tech Pharmacal. "These brands create a good strategic fit for Health Care Products as we expand our presence in the cough-cold and allergy categories. We are very excited to add Sinus Buster® and Allergy Buster® to our growing consumer products portfolio. We expect this acquisition will be accretive to earnings, and will contribute to the Company’s long term growth" he added.
Hi-Tech is a specialty pharmaceutical company developing, manufacturing and marketing generic and branded prescription and OTC 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 OTC products for the diabetes marketplace. Hi-Tech's ECR Pharmaceuticals subsidiary markets branded prescription products.
This press release contains certain future projections and forward-looking statements (statements which are not historical facts) with respect to the anticipated future performance of Hi-Tech made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such future projections and forward-looking statements are not assurances, promises or guarantees and investors are cautioned that all future projections and forward-looking statements involve significant business, economic and competitive risks and uncertainties, many of which are beyond Hi-Tech's ability to control or estimate precisely, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, the regulatory environment, including without limitation, reliance on key strategic alliances, availability of raw materials, fluctuations in operating results, loss of customers or employees, the possibility that legal proceedings may be instituted against Hi-Tech and other results and other risks detailed from time to time in Hi-Tech's filings with the Securities and Exchange Commission. The actual results will vary from the projected results and such variations may be material. These statements are based on management's current expectations and assumptions concerning the future performance of Hi-Tech and are naturally subject to uncertainty and changes in circumstances. No representations or warranties are made as to the accuracy or completeness of any of the information contained herein, including, but not limited to, any assumptions or projections contained herein or forward-looking statements based thereon. We caution you not to place undue reliance upon any such forward-looking statements which speak only as of the date made, except to the extent specifically dated as of an earlier date. Hi-Tech is under no obligation, and expressly disclaims any such obligation, to update, alter or correct any inaccuracies herein, whether as a result of new information, future events or otherwise.