Heart device manufacturer St. Jude Medical Inc. said Sunday that it would buy Advanced Neuromodulation Systems Inc. for about $1.3 billion in cash to gain new products used to treat chronic pain and nervous-system disorders.
St. Jude Medical, the No. 3 maker of implantable devices that regulate heart rhythms, would pay $61.25 for each share of ANS, a 30% premium over ANS' closing price Friday of $46.98.
The acquisition would allow St. Jude to expand beyond the cardiac market into neurology. Plano, Texas-based ANS makes implantable devices that stimulate the spinal cord by sending tiny, precise doses of electricity or drugs directly to nerve sites.
"This diversifies our growth while also giving us an opportunity to accelerate it," St. Jude Chairman Dan Starks said in a telephone interview.
In addition to its products that treat chronic pain, ANS has clinical trials underway to treat Parkinson's disease. It also is exploring treatments for migraine headaches, depression, obsessive-compulsive disorder and obesity.
Commenting on the price tag, Starks said: "We paid what we paid as the result of really very tough negotiations. ANS shareholders are getting good value -- they're getting good value immediately. We're pleased to be able to put the cash in their hands very quickly and then have all of us move forward together."
The deal, which is expected to close by the end of the year, would give St. Jude the No. 2 market-share position in the spinal cord stimulation market.
St. Jude might enter other markets, but "we really have plenty in our current growth platforms to keep us busy for quite some time," Starks said.
St. Paul, Minn.-based St. Jude said there would be no job cuts. The company said it would expand ANS' product line internationally.