Perrigo To Buy Paddock For $540M

Over-the-counter drugmaker Perrigo Co. said Thursday it will buy generic drugmaker Paddock Laboratories Inc. for $540 million.

ALLEGAN, Mich. (AP) -- Over-the-counter drugmaker Perrigo Co. said Thursday it will buy generic drugmaker Paddock Laboratories Inc. for $540 million.

Perrigo said Paddock has about $200 million in annual revenue, and Perrigo, based in Allegan, Mich., said it is expanding its portfolio of generic specialty pharmaceuticals, or drugs that require special handling.

Paddock Laboratories is based in Minneapolis and is privately held. According to its website, it sells around 80 products.

Perrigo said the deal should close during its fourth quarter, which ends in June.

Perrigo had $2.27 billion in revenue in its latest fiscal year, which ended June 26.

The deal should add about 5 cents per share to Perrigo's profit in fiscal 2011, the company said. The following year, it will boost the company's profit by 25 cents per share, but Perrigo expects 20 cents per share in amortization costs related to the deal. It said Paddock does not have any debts.

Perrigo said it expects a tax benefit of about $95 million connected with the deal. It will pay for Paddock using $310 million from bank debt agreements, $80 million in cash on hand, and $150 million from a new loan Perrigo took out from Morgan Stanley, JPMorgan, and Bank of America.

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