UPDATE 3-Sonova to buy Advanced Bionics Corp for $489 mln

* Total transaction costs 510 mln Sfr at current rates * Sonova sees deal adding to earnings 2nd year after close

* Deal cements Sonova position as global No. 1

* Shares up 1.2 pct

(Adds conf. call comments, further details, updated shares) ZURICH, Nov 9 (Reuters) - Sonova (SOON.VX) said on Monday it is to buy U.S. cochlear implant maker Advanced Bionics for $489 million in cash, reinforcing its position as global leader in hearing aid production.

The Swiss company said, including transaction costs, it would pay a total of 510 million Swiss francs ($505.5 million) at current exchange rates, and that the deal would be financed by 40 million francs in cash and an underwritten senior credit facility of 470 million francs.

"It's a good price. It's not a low price but it's not an overpriced asset," said Sonova Chief Executive Valentin Chapero in a conference call, adding the acquisition gave his company entry into a high-growth market with substantial upside.

The buy means Sonova, which currently has a 24 percent share of the hearing healthcare market, can put more distance between itself and its largest rivals Siemens (SIEGn.DE) and William Demant (WDH.CO), with 22 percent each.

Analysts welcomed the addition to the product portfolio but asked whether the price was right for Advanced, spun off from U.S medical devices company Boston Scientific (BSX.N) in 2007.

"The price of the acquisition at 4.2 times sales is on the high side but the strategic fit is welcome. This means Sonova can broaden its product range and become a provider of the most varied hearing solutions," said ZKB analysts in a note.

Sonova said Advanced Bionics has a share of around 18 percent of the $750-800 million per year cochlear implant market. Cochlear (COH.AX) of Australia is the segment leader, with an almost 70 percent market share.

Chapero said in a conference call the cochlear implant market was significantly underserved: "This is one of the areas where we might be able to make a difference and increase the penetration rate substantially."

Shares traded up 1.2 percent at 110.40 Swiss francs at 1117 GMT, against a 1.4 percent rise in the DJ European Healthcare index.

Advanced Bionics had revenues of $117 million in 2008. Sonova said it expected the cochlear implant market to grow at between 10 and 15 percent annually, and aimed to double Advanced Bionics sales and increase earnings before interest, tax and amortisation (EBITA) to 20 percent or more in 3-5 years.

Sonova said the transaction, which is subject to regulatory approval, is expected to close within three months. The company said the buy would be accretive to earnings in the second full year after closing, before transaction-related amortization.

ZKB analysts were unimpressed: "The fact that the acquisition will only be accretive to profits after two years leaves a bitter taste in the mouth." ($1=1.009 Swiss Franc) (Reporting by Martin de Sa'Pinto; Editing by David Cowell)