Endovascular device developers ev3 of Redwood City, Calif., and FoxHollow of Plymouth, Minn., reported a definitive agreement by which ev3 and FoxHollow will merge in a $780 million cash and stock transaction. The proposed merger would create a new company with a market capitalization of approximately $1.7 billion, based on the companies’ closing stock prices on July 20 this year.

Under the terms of the merger agreement, FoxHollow stockholders will receive 1.45 shares of ev3 common stock plus $2.75 in cash for each share of FoxHollow common stock they own. Upon completion of the transaction, FoxHollow stockholders would own approximately 41 percent of the combined company, and ev3 stockholders would own approximately 59 percent, according to the companies.

The two firms’ combined product portfolio will include a broad spectrum of products to treat vascular disease in both the peripheral and neurovascular markets, including atherectomy and thrombectomy, PTA balloons, stents, embolic protection devices, infusion catheters/wires, embolic coils and liquid embolics. The combined company will have direct operations or independent distributor presence in over 60 countries with more than 1,500 employees.

The transaction is expected to be completed in the fourth quarter this year.