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The spate of acquisitions at Perrigo Company (PRGO - Analyst Report) continued with its purchase of an ophthalmic sterile ointment and the solution product portfolio from the privately-held Fera Pharmaceuticals, for approximately $93 million in cash.

Perrigo has also agreed to make potential contingent payments amounting to $36 million, some of which pertain to Perrigo obtaining additional product rights from Fera. Moreover, the company expects tax benefit worth approximately $20 million due to the transaction.

The deal, which has strengthened the company's eye-care portfolio, looks good to us. The acquisition adds nine generic prescription drugs to its portfolio. Perrigo stated in its press release that the products added to its portfolio, via the acquisition, generated net revenues in excess of $30 million during calendar year 2012. The addition of the generic prescription drugs will further strengthen the company's Rx Pharmaceuticals segment.

Perrigo expects the acquisition to boost its adjusted earnings per share in fiscal 2014 by 12 cents. The company’s fiscal year ends on the last Saturday of Jun every year.

Perrigo has lately been quite active on the acquisition front. On Apr 1, 2013, the company announced that it has completed the acquisition of companion animal health company, Velcera, Inc. for approximately $160 million in cash.

In Feb 2013, the company acquired UK-based Rosemont Pharmaceuticals Ltd. By acquiring Rosemont Pharma, Perrigo has strengthened its position in the UK oral liquid formulations space.

In Dec 2012, Perrigo acquired privately held Cobrek Pharmaceuticals, Inc. for approximately $45 million in cash. In Jan 2012, the company inked a deal to acquire the assets of Georgia-based private company CanAm Care, thereby expanding its presence in the diabetes care market. In Jul 2011, it acquired Paddock Labs to expand its generic Rx business. We are impressed by Perrigo’s growth-by-acquisition strategy.

Perrigo carries a Zacks Rank #3 (Hold). Stocks such as Biogen Idec Inc. (BIIB - Analyst Report), Jazz Pharmaceuticals Public Limited Company (JAZZ - Analyst Report) and Santarus, Inc. appear to be more favorably placed. All three companies carry a Zacks Rank #1 (Strong Buy).

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