UPDATE 1-Conceptus buys Ovion patents from American Medical

* Pays $23.6 mln cash

* Says deal to immediately add to earnings

Oct 5 (Reuters) - Conceptus Inc (CPTS.O) said it has acquired Ovion intellectual property rights from American Medical Systems Holdings Inc AMMD.O for $23.6 million in cash, and expects the deal to add 5 cents per share to third-quarter earnings.

The rights acquired in the deal include all patents and intellectual property associated with the Ovion business acquired by American Medical Systems in 2005, the maker of contraception devices said in a statement.

The deal also releases Conceptus from making any royalty payments under a 2003 settlement agreement between Ovion and Conceptus. The company has been paying American Medical 3.25 percent of sales of its contraception procedure, Essure.

American Medical Systems shares rose 4 percent to $16.95 in extended trade after closing at $16.29 on Nasdaq. Conceptus shares were flat at $17.42 in after-hours trade. (Reporting by Shailesh Kuber in Bangalore; Editing by Ratul Ray Chaudhuri)