Lifeway Foods (LWAY) - Get Report agreed Tuesday to buy a closely held Philadelphia-area cream cheese producer.

Terms of the deal weren't disclosed, but Morton Grove, Ill.-based Lifeway said it expects to close the deal within 60 days. Lifeway said the target company, which wasn't identified, makes farmer's cheese as well as gourmet cream cheeses.

The announcement came at the end of a day in which shares in tiny Lifeway surged 12% in heavy volume, boosting its market capitalization, which stood at $162 million at the close of trading.

"This addition to Lifeway Foods provides the company with several strategic advantages with the most important being that it now gives us our own distribution system on the East Coast," CEO Julie Smolyansky said. "This will allow us to more cost effectively distribute Lifeway's existing product lines to these large and important Philadelphia, New York and New Jersey markets."

The deal comes just a month after Lifeway said it would offer for the first time a line of no-sugar-added kefirs designed for consumers who follow low-carbohydrate diets.

On Tuesday, Lifeway surged $2 to $19.24.