St. Jude Medical Inc., the Little Canada-based maker of heart-rhythm devices, said Wednesday that it will buy EP MedSystems for $92.1 million for its products to treat heart arrhythmia.
Shareholders of EP MedSystems will get $3 cash for each share, with the choice of getting St. Jude shares, the companies said. The amount is more than double EP MedSystems' $1.41 closing price Tuesday.
The purchase speeds St. Jude's entry into the market for ultrasound heart monitors, called echocardiography, which the company said is growing more than 25 percent a year. EP MedSystems, of West Berlin, N.J., also makes devices that shock the heart to treat atrial fibrillation, a rapid and potentially deadly heart rhythm that affects millions of people each year.
"This transaction will accelerate the growth of St. Jude Medical's program to help physicians cure atrial fibrillation," said Daniel Starks, St. Jude Medical's chief executive.
EP MedSystems' share price more than doubled Wednesday, to $2.86. Before Wednesday, it had fallen 29 percent in the past year.
St. Jude Medical fell 62 cents, or 1.4 percent, to $44.11.
St. Jude Medical said it expects 60 percent of the deal will be in cash and 40 percent in stock. Both company boards approved the sale, which is expected to close in the third quarter. St. Jude Medical also increased by $50 million its stock buyback authorization, to a total of $300 million, to offset shares it expects to issue in the purchase. About 344 million of shares of St. Jude common stock were outstanding as of Feb. 15.
EP MedSystems Chief Executive David Bruce will work for St. Jude Medical after the transaction, the companies said.