Hi-Tech adds magnesium supplements
This article was originally published in The Tan Sheet
Executive Summary
Hi-Tech Pharmacal acquires Mag-Ox supplement line from Blaine Pharmaceuticals, adding to the specialty pharma's OTC offerings for diabetic consumers. The $4.1 million cash transaction includes rights to magnesium supplements that generated about $3.4 million in 2009 sales, including Mag-Ox 400, Maginex and Uro-Mag. Hi-Tech said March 2 magnesium deficiency is common among diabetics and the Amityville, N.Y.-based firm expects the acquisition to be accretive and cash flow-positive soon
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The recently acquired line of magnesium supplements helps Hi-Tech Pharmacal's Health Care Products division increase sales 17.4 percent to $2.7 million in its fiscal 2010 fourth quarter and 11.9 percent to $11.3 million in the full year ended April 30. Annual sales of Mag-Ox products reached $3.4 million prior to Hi-Tech's March acquisition. The firm plans to increase distribution and extend the brand in the new fiscal year, CEO David Seltzer said July 13 (1"The Tan Sheet" March 8, 2010, In Brief). Amityville, N.Y.-based Hi-Tech, which markets to the diabetic health segment, also attributed OTC growth to increased sales of its Diabetic Tussin and Multi-betic products. The company reported overall net sales of $163.7 million - up 50.7 percent - and net income of $31.1 million - up 217 percent - for fiscal 2010
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Hi-Tech Pharmacal seeks OTC acquisitions: The pharmaceutical firm plans to bolster its current line of diabetic consumer health products with additional brand acquisitions. The OTC market is "a critical area for future growth and we are continuing to seek acquisitions to build our OTC business," said Hi-Tech Pharmacal CEO David Seltzer March 11. The Amityville, N.Y., company purchased the Mag-Ox magnesium supplement line in early March (1"The Tan Sheet" March 8, 2010, In Brief). For the November-January period, Hi-Tech grew sales in its Health Care Products division, including OTCs, 11.5 percent to $2.9 million, while overall net sales jumped 32 percent to $38.8 million
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