NEW YORK (AP) -- Covidien Ltd. said Friday it agreed to buy smaller medical device maker VNUS Medical Technologies Inc. for $440 million in cash.
The medical device maker and diversified health care company is valuing VNUS at $29 per share, a 36-percent premium to that stock's Thursday closing price. Covidien said it expects the deal to be complete by June 30.
San Jose, Calif.-based VNUS makes products that treat varicose veins and venous reflux disease, a circulatory condition that causes blood to pool in the veins of the leg. That can cause swollen veins and discolored skin. Covidien said it is expanding its vascular business by buying VNUS, and it will make VNUS part of its vascular product line.
VNUS reported $101.2 million in revenue in 2008, and expects $107 million to $111 million this year. Covidien, which is based in Dublin, said the costs of the purchase will reduce its 2009 profit by a small amount.
In premarket trading, VNUS shares jumped $7.38, or 34.6 percent, to $28.70. The stock closed at $21.32 on Thursday, and has traded between $10.81 and $24.44 over the last year.
Covidien shares finished at $34.20 Thursday.