Specialty pharmaceuticals firm Alliance today unveiled a deal to acquire the global rights to Tyratech's head lice treatment, Vamousse, for up to $17.5m (£13m).
The announcement boosted Alliance Pharma's share price by more than five per cent to 61.97p in morning trading.
Shares in Aim-listed Tyratech, which makes insect and parasite control products, rose more than 100 per cent to 2.88p.
The agreement, which is set to be complete by the end of the year, includes an initial consideration of $13m and deferred contingent consideration of up to $4.5m, and it is subject to approval by Tyratech's shareholders.
Vamousse was launched in the US and UK in 2014, and net sales for 2016 were $6.6m with a gross profit of $4.6m. For the six months to June 2017, net sales were $3.3m with a gross profit of $2.3m.
Alliance said it plans to make use of its EU affiliates and extensive distribution network to drive further growth in the brand.
After the transaction is complete, Tyratech will enter into a transition services agreement to transfer the existing Vamousse business to Alliance during 2018.
John Dawson, Alliance Pharma’s chief executive, said Vamousse will become its third major international growth brand.
“The acquisition will be immediately earnings enhancing and expected to be accretive to our return on invested capital from the second year.
"Vamousse will leverage our current infrastructure as it fits well into our growing UK consumer business, whilst expanding our footprint into the US. The brand will also benefit from added distribution both through our EU affiliates and through our international partner network operating in over 90 territories worldwide," Dawson said.
Alliance last week acquired the rights anaesthetic gel product Ametop from Smith & Nephew.
Investec analyst Andrew Whitney said acquisitions are expected to continue in 2018 and beyond.