A unit of private equity giant Blackstone Groupwill buy knee and ankle brace maker DJOfor $1.3 billion, the companies said on Monday.
The cash offer of $50.25 per share represents a 19 percent premium over DJO's closing price of $42.10 on Friday.
The deal will bring together DJO and medical device maker ReAble Therapeutics, formerly known as Encore Medical. The companies make complementary orthopedic and pain-management products, DJO said.
A Blackstone affiliate is the controlling shareholder of ReAble. The affiliate will provide the equity financing for the deal.
Biomet, a much larger orthopedic products maker, last month agreed to a sweetened takeover bid of $11.4 billion from a group of private equity firms that includes Blackstone.
The DJO transaction is worth $1.6 billion, including $300 million of assumed debt, and is expected to close in the fourth quarter.
DJO will have to pay ReAble a break-up fee of $18.7 million if the deal falls through. The DJO board has unanimously approved the transaction.
Wachovia Securities is the financial advisor to DJO, while Credit Suisse is advising ReAble and Blackstone.