(Reuters) Hypermarcas <HYPE3.SA>, Brazil's largest maker of toiletries, said it would pay 1.3 billion reais ($751 million) for drugmaker Neo Quimica to help it expand further into the over-the-counter medicines market.

The deal ties in with Hypermarcas' strategy to build its brand portfolio in the personal and beauty care sectors as jobs and household income grow in Latin America's largest economy, Chief Executive Claudio Bergamo said in a securities filing.

The Neo Quimica purchase is Hypermarcas' fifth acquisition this year and its fourth in the over-the-counter medicine sector, where drugs are sold without medical prescription, in 2009.

"This combination will strengthen the opportunities for organic growth of our medicines unit, with synergies in several areas," Bergamo said in the filing.

In a recent interview, Bergamo told Reuters the company had "at least" 500 million reais in cash for acquisitions.

He said at the time that Hypermarcas had no plans to raise cash through bonds or loans to fund more purchases.

Hypermarcas, controlled by consumer goods tycoon Joao Alves de Queiroz Filho, said it will make three cash payments to Neo Quimica shareholders worth a total 687 million reais and issue about 17.5 million new shares to help pay for the takeover.

Neo Quimica, a drugmaker founded in 1959 and based in the centre-south state of Goias, had gross revenue of 380 million reais over the past twelve months and earnings before interest, tax, depreciation and amortisation of 95 million reais.

Hypermarcas stock gained on Friday for a third day, advancing 1.2 percent to 38.95 reais, and have more than doubled this year. ($1=1.728 reais) (Additional reporting by Daniela Machado and Eduardo Simoes in Sao Paulo; editing by Simon Jessop)