St. Jude to Acquire AGA Medical

(Story updated with additional details of transaction)
NEW YORK (TheStreet) -- St. Jude Medical(STJ) said it will acquire all outstanding shares of AGA Medical Holdings( AGAM ) for $20.80 a share.

The cash and stock transaction is valued at about $1.3 billion, including the assumption of about $225 million in outstanding debt.

The transaction will be carried out as an exchange offer, followed by a merger. It's expected to close by the end of the year. Under the deal, AGA Medical shareholders will receive $20.80 for each share of AGA Medical stock they own in cash or St. Jude Medical common stock. The split between cash and stock will be 50%.

St. Jude Medical said it expects to begin the exchange offer for AGA Medical shares later this week.

In connection with the deal, St. Jude's directors approved a repurchase of up to $600 million of St. Jude Medical common shares to offset the shares issued in the transaction.

St. Jude said the combination of it and AGA will result in great advantages in the structural heart market and will help St. Jude build a leading position in four additional markets. St. Jude said it expects AGA to help increase its revenue by the low double-digits for 2011. The transaction is expected to be accretive to earnings in 2011 and beyond.

Shares of AGA have risen 40.5% to $20.66 in premarket trading Monday. St. Jude shares closed Friday's trading session at $39.90, up 0.5%.

-- Written by Andrea Tse in New York.

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