Bayer, whose shares were down 2.3 percent by 0823 GMT, will launch a public tender offer to acquire all Conceptus shares for $31.00 each in cash, in an offer agreed with Conceptus's management, Bayer said on Monday.
That is a premium of 19.7 percent over the stock's closing price on Friday and a multiple of about 30 times the adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) that Conceptus is targeting for this year.
Shares in global healthcare equipment and services companies on average trade at 9 times annual EBITDA, according to Thomson Reuters StarMine.
Bayer's women's healthcare business had sales of 3.15 billion euros ($4.1 billion) last year, from products including its Yasmin contraceptive pill and Mirena intrauterine device.
"Our experience in the field of gynaecology combined with our sales and distribution expertise will help to further develop Conceptus' business," said Andreas Fibig, head of Bayer unit HealthCare Pharmaceuticals.
Conceptus, which makes inserts that are placed into the fallopian tubes as a permanent non-hormonal contraceptive, had $28.2 million in adjusted EBITDA last year on sales of $141 million.
The U.S. company has forecast 2013 adjusted EBITDA of between $34 million and $37 million on sales of between $155 million and $159 million.
Bayer Chief Executive Marijn Dekkers took the post in 2010 with a reputation for being able to handle transformational takeovers, but the Conceptus deal, expected to close by mid-year, is the latest in a line of small and medium-sized buys.
Last September Bayer agreed to buy Teva's U.S. animal health operations for up to $145 million, following the purchase of AgraQuest, a developer of bacteria to fight plant disease, for at least $425 million.