Heart device maker said it would buy smaller rival for $3.4 billion.
St. Jude said on Wednesday it would offer $63.50 per Thoratec share, which represents a premium of about 10 percent to the stock's Tuesday close.
Thoratec's shares closed up 18 percent on Tuesday after Bloomberg reported that St. Jude was in talks to buy the company.
Thoratec's shares rose 9 percent to $63 in premarket trading on Wednesday. (Get the latest quote here.)
The deal, expected to close in the fourth quarter, is net of cash, the companies said.
Pleasanton, California-based Thoratec makes devices used for mechanical circulatory support to treat heart failure patients.
Buying Thoratec would help St. Jude reduce its exposure to the cardiac rhythm management market, Wells Fargo analysts wrote in note on Tuesday.
Thoratec can solicit rival offers for the next 30 days under the agreement.
Bank of America/Merrill Lynch is acting as financial adviser to St. Jude and has also provided financing. Gibson, Dunn & Crutcher is serving as legal counsel.
Guggenheim Securities is acting as financial adviser to Thoratec and Latham & Watkins is serving as legal counsel.
St. Jude also reported second-quarter earnings excluding items of $1.03 a share on sales of $1.41 billion.
The company forecast third-quarter adjusted earnings at 96 cents to 98 cents a share, and expects full-year earnings at $3.96 to $4.00 a share.
—CNBC contributed to this report.