Britain's Smith & Nephew is to buy ArthroCare for an agreed $1.7 billion in cash to strengthen its treatments for sporting injuries, an area growing faster than its main replacement hips and knees business.

Smith & Nephew said it would pay $48.25 a share, a 20% premium to the average share price of Austin, Texas-based ArthroCare over the past 90 days.

S&N Chief Executive Olivier Bohuon said revenues at the UK firm's sports medicine business were currently growing by a high single-digit percentage, compared with a low single-digit for replacement hips and knees.

"We wanted to acquire in high-growth businesses and sports medicine is definitely one of them," he said.

ArthroCare's expertise in treating shoulder joints would complement S&N's strength in knee surgery, he added.

ArthroCare, which had net sales of $368m in 2012, also comes with an ENT (ear, nose and throat) franchise that can be developed outside the US, Bohuon said.

The deal, which is backed by ArthroCare's board and One Equity Partners, its largest shareholder with 17%, will add about $85m to S&N's annual trading profit in the third full year after the deal closes, the British firm said.

Including the cash on ArthroCare's balance sheet, S&N said the acquisition would cost it a net $1.5 billion, financed from its debt facilities and cash balances.

Revenues in S&N's sports medicine business rose 7% in the third quarter of its financial year, compared with 5% growth across the whole group.