Maple Grove-based Upsher-Smith Laboratories has agreed to sell its generic pharmaceuticals business for $1.05 billion to Sawai Pharmaceutical Co. of Japan.

English-born pharmacist and chemist Frederick Alfred Upsher Smith founded the company in Minneapolis in 1919 to produce digitalis, a drug used to treat cardiac disease.

Upsher-Smith is owned by the Evenstad family through its privately held holding company Acova Inc. Mark Evenstad is CEO of Upsher-Smith and his father, Ken, is company chairman.

"After owning and operating Upsher-Smith for the past 47 years, my family and I made the decision to sell the largest part of our company, the generic pharmaceuticals business, to Sawai," Mark Evenstad said in a statement. "It was extremely important for us to find a buyer that shared Upsher-Smith's values, was completely committed to its long-term success and was looking for a strong and fully operational U.S. platform for growth."

Acova is also parent to Proximagen, an early-stage drug discovery and development company, and Pairnomix, a genetics research company. Those two companies and the nongeneric pharmaceuticals business of Upsher-Smith are not part of the transaction with Sawai.

Sawai will be purchasing more than 30 drugs, mainly oral solid medications, and 30 more drugs that are under development.

Sawai will use the acquisition as a foothold in its expansion into the U.S. market. Sawai gains Upsher-Smith's manufacturing capabilities here and Upsher-Smith is expected to benefit from Sawai's intellectual property and research and development.

"We are delighted to sign this agreement today with Acova to acquire Upsher-Smith, which is our first overseas investment," Sawai president Mitsuo Sawai said.

Sawai, which is listed on the Tokyo Stock Exchange, last year had revenue of $1 billion, up 17 percent from the year before, and earned $143 million, a 22 percent gain. It will use bank loans and available cash to complete the purchase.

Upsher-Smith has 550 employees in Minnesota, Colorado and New Jersey. No layoffs or job losses are expected as a result of the sale, and Rusty Field, president of Upsher-Smith, will remain with the company.

"We look forward to working closely with Rusty and the talented management team to forge a new global chapter in Upsher-Smith's future together. Most importantly, we are committed to the entire team at Upsher-Smith, and to expanding the opportunities for the U.S. workforce at Upsher-Smith," Sawai said in a statement.

The deal is expected to close by the end of June.