NEW YORK ( TheStreet) -- Merck ( MRK) plans to acquire Inspire Pharmaceuticals ( ISPH) for about $430 million.

Merck will buy Inspire at $5 a share in cash, representing a 26% premium to Inspire's closing price on Monday of $3.98.

Inspire shares were higher by almost 25% to $4.96.

Merck, in a statement Tuesday, said it believes the acquisition will strengthen its ophthalmology business through the addition of the "talented commercialization organization at Inspire."

"Merck continues to build upon its long-term commitment to improving therapeutic options for the treatment of eye diseases," said Beverly Lybrand, Merck's senior vice president and general manager, neuroscience and ophthalmology. "This deal helps address the needs of patients and customers in ophthalmology and creates value for both companies."

The transaction was approved by the boards of both companies.

Warburg Pincus Private Equity IX, which owns about 28% of Inspire shares, agreed to tender all of its shares into the offer.

--Written by Theresa McCabe in Boston.

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