DUBLIN (TheStreet) -- Horizon Pharma (HZNP) is buying Hyperion Therapeutics (HPTX) for $1.1 billion to expand its portfolio of drugs treating rare diseases, the companies announced Monday.

The all-cash deal values Hyperion at $46 a share, an 8% premium to Friday's close of $42.74. Hyperion had previously been the subject of takeout rumors, pushing its stock price higher ahead of Monday's deal announcement. 

"The Hyperion acquisition will expand and diversify our product portfolio by adding two complementary orphan disease products, Ravicti and Buphenyl, and leverage as well as expand the existing infrastructure of our orphan disease business," said Horizon CEO Tim Walbert, in a statement. 

Hyperion's two drugs, Ravicti and Buphenyl, treat urea cycle disorders -- rare diseases in which ammonia builds up in the body. Net sales of Ravicti and Buphenyl were $113.6 million in 2014. 

The number of drugs in Horizon's orphan disease business unit will expand to seven from five following the close of the Hyperion purchase. Horizon says the deal will be immediately accretive to adjusted earnings.

Horizon shares closed Friday at $21.81. In premarket trading Monday, Horizon shares are up 7.4% and Hyperion stock was up 6.6%.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.