The acquisition covers Binotal, including Mexico, Brazil, Columbia, Ecuador and select countries in Central America.
For a temporary period of time, Bayer will provide certain distribution support services to the product that has been sold in the region for more than 40 years.
The product has a history of efficacy and safety in improving the lives of people suffering from bacterial infections at a wide variety of sites with varying severity.
In 2012, sales of Binotal were more than C$11m ($10.45m) in Latin America, while two-thirds of the sales was contributed by Mexico and Brazil.
Paladin Labs interim president and CEO Mark Beaudet said the product has strong brand recognition and strategically adds to business growth in Latin America.
"Added to our existing product portfolio, Binotal will provide additional critical mass and strategic options for further developing our operations in Latin America," Beaudet added.
Financial details of the deal remain undisclosed.