KU is the US specialty generic pharmaceuticals subsidiary of biopharmaceuticals firm UCB. The acquisition creates a key player in drug industry.
The combined company generated pro-forma revenues of over $800m for the 12 months to end June.
KU brings a portfolio of 18 products and a pipeline that includes 11 product applications pending with the US Food and Drug Administration.
Lannett financed the acquisition through a combination of proceeds of a recently completed $1.285bn debt financing and cash.
The company has also entered into a $1.035bn secured credit facility and issued $250m of senior unsecured notes, including those issued to UCB, the proceeds of which were utilized for funding the acquisition and associated transaction costs.
Lannett CEO Arthur Bedrosian said: "KU is a highly profitable business that extends our size, scale and reach.
"With the acquisition, we have expanded and strategically diversified our product portfolio and pipeline, and added complementary research and development expertise."
Lannett and UCB plan to look for other potential opportunities for more business collaborations.
US-based Lannett develops, manufactures, packages, markets and distributes generic pharmaceutical products for a range of medical indications.