Smith & Nephew has unveiled a deal to buy US tissue repair business Rotation Medical for up to $210m (£159m).
The medical technology firm, which makes replacement hips and knees, said it would pay an initial consideration of $125m and up to $85m over the next five years dependent on financial performance.
"Rotation Medical furthers our strategy to invest in disruptive technologies that accelerate the transformation of Smith & Nephew to higher growth," said chief executive Olivier Bohuon, who will step down by the end of next year.
"The Rotation Medical rotator cuff system is an innovative technology serving unmet clinical needs. It is highly complementary to our sports medicine portfolio and provides a compelling new treatment option for our customers," Bohuon added.
The move flies in the face of reports that activist investor Elliott Management has urged the company to shed operations.
Shares in the firm, which got a shot in the arm on rumours Elliott was building up a stake, dipped 0.42 per cent to 1,422p in afternoon trading.
In clinical studies, Rotation's technology has been shown to improve tendon healing by inducing growth of new tendon-like tissue. It will be sold through Smith & Nephew's sports medicine sales force, and filing is being prepared for approval in the EU.
The transaction is expected to close in late 2017.