Cedarburg Hauser Pharmaceuticals, the Grafton, WI-based contract developer and manufacturer of active pharmaceutical ingredients (API) for the drug industry, will be acquired for $41 million by Albany Molecular Research, (NASDAQ:AMRI), the two companies announced today.

Albany, NY-based AMRI, a global contract drug discovery, development, and manufacturing firm, said it is paying $38.2 million in cash and assuming $2.8 million in Cedarburg debt to acquire the company from primary shareholder Signet Healthcare Partners, a New York-based private equity firm.

The deal is expected to close in April. AMRI said Cedarburg is expected to continue to operate independently within AMRI's API business unit. The operations are expected to remain in Wisconsin, according to Cedarburg marketing manager Bob Forner.

After seven years with the company, Cedarburg CEO Tony Laughrey will step down upon the deal's closing, the companies said. Laughreypreviously served as president and CEO of KBI BioPharma in Durham, NC.

Chuck Boland, Cedarburg co-founder and executive vice president of business development, will lead the local operation and report to George Svokos, AMRI's senior vice president of sales and general manager of the API division.

"We are very excited to be joining efforts with Cedarburg, as they bring a unique blend of expertise in complex API, a scalable business infrastructure, and extensive customer relationships that will augment our existing capabilities and services," said William Marth, AMRI's president and CEO, in a press release. "This transaction represents an important first step in building out our API capabilities, broadens our offerings and customer base, and provides us with an ideal platform to pursue additional value creation opportunities."

Cedarburg is forecasting $19 million in 2014 revenue, AMRI said.

Cedarburg serves generic and branded pharmaceutical customers, and its core capabilities include controlled substances, steroids, vitamin D analogs, and inorganics for the analgesic, ophthalmology, and oncology therapeutic areas. Cedarburg has provided API development and manufacturing support for 13 approved products, AMRI said. Cedarburg also has an "attractive development pipeline" that includes "multiple late-stage products" that will contribute to future growth, AMRI said.

Cedarburg, founded in 1997, has 78 employees at its headquarters in Grafton and lab space in Milwaukee, Forner said.

It became Cedarburg Hauser Pharmaceuticals in 2009 when it acquired Denver-based InB:Hauser Pharmaceutical Services, the Milwaukee Business Journal reported.

This article originally appeared on Xconomy, along with:

Jeff Engel  has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.