Shares of Angiotech Pharmaceuticals ( ANPI) were getting a lift Wednesday after the drug and device maker said it agreed to acquire privately held American Medical Instruments.

The $785 million acquisition will be funded by a $600 million loan and about $200 million in cash, according to the company. The transaction is expected to close in the second quarter and should immediately add to earnings.

Angiotech's stock was up $1.44, or 11.5%, to $14.02 on heavy volume. Angiotech says the acquisition will provide it with several new product opportunities and drive long-term growth. The combined company will focus on general, plastic and ophthalmic surgery, as well as performing vascular surgery, interventional radiology and tumor biopsies.

"The acquisition of AMI significantly diversifies Angiotech's revenue base and gives the company global manufacturing, marketing and sales capabilities," the company said in a press release Wednesday.

American Medical's revenue last year is estimated at $174 million, Angiotech said, representing around 46% of the combined revenue the two companies would have had in 2005 if they were already merged. For the nine-month period ended Sept. 30, Angiotech had revenue of $159.8 million.

Currently, Angiotech is probably best known for providing a drug called paclitaxel that's used on Boston Scientific's ( BSX) drug-coated Taxus stent.

The company recently acquired drug-delivery assets from Edwards Lifesciences ( EW), including a type of surgical sealant and experimental drug-eluting catheter technologies.

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