Medical device maker Hologic Inc said it would acquire Gen-Probe Inc for about $3.75 billion in cash to expand its diagnostic business.

Under the deal, shareholders of diagnostic test maker Gen-Probe -- which put itself up for sale a year ago -- will receive $82.75 per share, a 20 percent premium to the stock's Friday close.

The transaction will add about 20 cents per share to Hologic's earnings in the first fiscal year after the deal closes.

The company expects annual cost synergies of about $75 million within three years of the close of the transaction, and about $40 million in the first year.

Hologic, which makes cervical cancer tests and mammography systems, expects the deal to close in the second half of the year.

Hologic, which has more than 500 employees in China, said it plans to market Gen-Probe's products including blood tests and sexually transmitted disease tests in both developed and emerging markets.

Goldman Sachs & Co and Perella Weinberg Partners are acting as financial advisers to Hologic, while Morgan Stanley & Co is advising Gen-Probe.

Gen-Probe also reported better-than-expected first-quarter results, helped by strong sales of its women's health products.

Separately, Conceptus Inc said it settled a patent infringement litigation related to Hologic's Adiana Permanent Contraception System.

Under the settlement, Hologic agreed to remove its Adiana system from the market by May 18.

Shares of Hologic closed at $21.23 on Friday on the Nasdaq, while those of Gen-Probe were up about 20 percent at $82.25 before the bell on Monday. (Reporting by Anand Basu in Bangalore; Editing by Roshni Menon)