Drug and medical device maker Baxter International Inc. said Tuesday it plans to buy Synovis Life Technologies Inc. for about $325 million in deal expected to close in next year's first quarter.
Baxter, based in Deerfield, Ill., said the Synovis board unanimously approved the deal and is recommending that its shareholders also accept the $28 per share offer, a 51 percent premium over Synovis' closing price on Monday,
Synovis, based in St. Paul, Minn., makes medical devices used mostly in soft tissue repair surgical procedures. This includes obesity and vascular surgery and hernia repair. It also makes products used in breast reconstructions and for head, neck and hand procedures. The company also has a new business area focused on orthopedic and wound management products.
Baxter said the Synovis product portfolio is "highly complementary" to its products. Baxter expects to take a hit of about 4 cents per share to 2012 earnings due to costs from the deal. But it said the acquisition will start adding to earnings after 2013.
Baxter said that after adjusting for net cash on the Synovis balance sheet, the deal will cost it about $260 million.
Shares of Synovis approached the offered price in morning trading Tuesday, rising $9.34, or 50.6 percent, to $27.77 while Baxter shares rose 4 cents to $49.80.
Last month, Baxter said it completed its $380 million acquisition of the privately held Baxa Corp., which develops technology that makes the delivery of liquid oral drugs and IV fluids safer and more efficient.