The agreement includes an upfront cash payment by Baxter of $240m, plus potential payments of up to $90m should the company achieve sales milestones. ApaTech, with sales of about $60m in 2009, makes Actifuse, a synthetic bone graft material sold in the US and Europe.

Baxter said that the transaction intended to bolster its position in the orthobiologics sector and is not expected to have a material impact on its 2010 financial results.

ApaTech shareholders include Encore Ventures, Healthcor Partners and MTI. Encore Ventures, ApaTech’s largest shareholder, is a division of European venture capital firm DFJ Esprit.

David Lewis, an analyst with Morgan Stanley said that he expects Baxter to supplement growth through more acquisitions rather than continuing to use cash to repurchase shares.