Horizon Pharma has agreed to purchase US drug maker Hyperion Therapeutics for $955.7 million in cash to bolster its line of drugs to treat rare diseases.

Hyperion’s shares rose 6% in premarket trading Monday, while Horizon’s shares rose about 7.4%.

Horizon Pharma

Horizon Pharma’s portfolio gets strengthened by two treatments

Ireland’s Horizon Pharma will offer $46 a share, which is a 7.6% premium over Hyperion’s closing price of $42.74 a share on Friday. The acquisition will immediately add to Horizon’s adjusted earnings.

Horizon will fund the deal with a combination of cash and $900 million in debt commitments. The deal has been approved by the boards of both companies and is expected to close in the second quarter.

The deal will enhance Horizon’s drug portfolio by adding two treatments for a rare metabolic condition. Horizon now has seven products in its line.

Horizon chief executive Timothy P. Walbert said in a statement: “The Hyperion acquisition will expand and diversify our product portfolio by adding two complementary orphan disease products, Ravicti and Buphenyl, and leverage as well as expand the existing infrastructure of our orphan disease business”.

Considering the limited financial incentive to develop treatment, orphan diseases are rare conditions that haven’t been adopted by pharmaceutical industry. In a statement Walbert said that Ravicti and Buphenyl are expected to add $100 million to adjusted EBITDA in 2016 and result in a savings of more than $50 million.

Ravicti and Buphenyl are treatments for those with urea cycle disorder, which affects about 2,100 people in the U.S. Net sales for the two drugs were $30.8 million and $113.6 million, respectively, in 2014.

Hectic deal making in drug sector

Hectic deal making has been witnessed in the drug sector in the first few months of the year, pushing up shares of companies that are viewed as potential takeover targets. Since makers of drugs that treat rare diseases are typically able to charge hefty premiums for their products, these drug makers tend to make attractive targets.

Horizon Pharma had $900 million in debt commitments from Citigroup Global Capital Markets Inc. and Jefferies LLC. The Irish drug maker said along with cash and cash-equivalents on hand, this will be enough to finance the latest acquisition and repay some debt.

Horizon shares were up about 47% this year through Friday’s close.

Last June, ValueWalk published an article on the Activist Insight report, highlighting how event-driven investments are leading the way, with Horizon Pharma rising fast on the back of mergers.