Shares of Perrigo Co. jumped to their highest point in a decade Monday after the company said it would buy Orion Laboratories for $48 million in cash, expanding its market in Australia and New Zealand.
Perrigo, based in Allegan, Mich., makes over-the-counter drugs. Orion, based in Australia, is a privately held supplier of nonprescription, store-brand drugs. Also, Orion makes and distributes pharmaceutical products to hospitals.
Perrigo shares jumped $1.60, or 3.2 percent, to $51.17 in afternoon trading. Earlier, the stock reached $51.33, its highest point in a decade.
Perrigo said the addition of Orion will boost annual sales by more than $30 million and add to earnings in the first year.
"The acquisition of Orion expands our global presence, complements our existing business and increases value for our shareholders," said Chairman and CEO Joseph C. Papa, in a statement. "By leveraging Orion's product pipeline and local marketing and distribution expertise, Perrigo is expanding its ability to meet the world's growing need for quality, affordable health care."
Collins Stewart analyst Louise Chen reaffirmed a "Buy" rating and $55 price target for Perrigo, citing the company's international expansion.
"There are immediate revenue synergies since Perrigo offers Orion a larger breadth of products," Chen said. This acquisition underscores our investment thesis in Perrigo's stock."
She expects the buyout to add between a penny and 2 cents per share to the company's profit in the first year after the deal closes.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.