(Reuters) - Medical device company C. R. Bard Inc said it would buy Rochester Medical Inc, which makes products for urinary retention and incontinence, for about $262 million to boost its presence in the urology homecare market.
Bard will pay $20 per Rochester Medical share, representing a hefty 45 percent premium to the stock's last close. Rochester Medical shares were up 44 percent in premarket trading on Wednesday.
Rochester Medical's products such as disposable medical catheters are used by patients who need help with urinary retention and incontinence outside the hospital.
"We believe that strengthening our position in the home care market, and specifically the large and fast-growing intermittent self-catheter segment, is strategically important at this time," Bard Chief Executive Timothy Ring said.
By 2018, an estimated 1.1 billion individuals worldwide will be affected by some form of lower urinary tract or bladder outlet obstruction, Bard said.
Bard, which has a market capitalization of more than $9 billion, makes medical devices for use in vascular, urology, oncology and specialty surgical fields.
Rochester Medical board has unanimously approved the agreement and will recommend the company's shareholders approve the deal that is expected to close in the fourth quarter.
Piper Jaffray acted as financial adviser to Rochester Medical, while Dorsey and Whitney was its legal counsel.
Bard shares closed at $114.66 on Tuesday on the New York Stock Exchange.
Reporting by Esha Dey in Bangalore; Editing by Joyjeet Das, Maju Samuel