By late afternoon, shares had added 18.1% to $32.26.
The company, which distributes over-the-counter medication and healthcare products, said the acquisition adds a new platform in feminine care and strengthens its portfolio. Prestige Brands intends to purchase Insight, a distributor of feminine care and healthcare products, for $750 million in cash.
"The acquisition is expected to boost Prestige's annual revenues to approximately $800 million, bringing us closer to our stated goal of becoming a billion dollar OTC products company," said Prestige CEO Matthew M. Mannelly in a statement.
The transaction is expected to close in the first half of this fiscal year, pursuant to customary closing conditions.
TheStreet Ratings team rates PRESTIGE BRANDS HOLDINGS as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PRESTIGE BRANDS HOLDINGS (PBH) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."