Endo International (NSDQ:ENDP) and Boston Scientific (NYSE:BSX) today confirmed reports of a $1.65 billion acquisition of Endo’s American Medical Systems urology business.

The companies said the deal, expected to close during the 3rd quarter, does not include AMS’s star-crossed pelvic mesh assets, for which Endo said it’s "evaluating strategic alternatives."

Marlborough, Mass.-based Boston Scientific said it plans to integrate the AMS men’s health & prostate business into its urology & women’s health segment. The deal calls for a $1.6 billion up-front payment and a potential $50 million milestone based on 2016 sales, the companies said.

Rumors that a deal between Boston and Endo could be in the offing surfaced early last week, although reports that Endo was shopping the business came to light as early as last August. Endo bought pelvic devices maker AMS for $2.9 billion in cash in 2011, before it became embroiled in thousands of high-profile product injury lawsuits over pelvic mesh implants (which also ensnared Boston Scientific and other mesh makers).

The deal is Boston Scientific’s largest acquisition since its infamous, $27 billion buyout of Guidant Corp. nearly a decade ago.

“We believe this strategic acquisition will strengthen Boston Scientific’s global leadership in the urology device category, while delivering a strong return to our investors," president & CEO Mike Mahoney said in prepared remarks. "The combination of Boston Scientific’s urology & Women’s Health and AMS’ urology portfolios will create a business with nearly $1 billion in annual sales and enable significant synergies and strong future growth prospects through portfolio innovation and international market expansion. We look forward to serving customers and impacting patient care in ways that could not be realized by either company alone."

The Minnetonka, Minn.-based AMS unit employs about 800 workers worldwide, generating roughly $400 million in sales last year, according to a press release. Boston said it expects the deal to create more than $50 million worth of "pre-tax synergies" by the end of 2018, with adjusted earnings per share unaffected in 2015, accretive by at least 3¢ in 2016, by 7¢ in 2017 and "increasingly accretive" after that.

Endo paid $830 million last year to settle some 20,000 of the lawsuits, but admitted no guilt. The company last year also took a $500 million write-down on the value of its AMS segment, saying at the time that it would book a $316 million pre-tax charge to boost its product liability reserve to $520 million to cover "all known, pending and estimated future claims primarily related to vaginal mesh cases."

"The divestiture of AMS marks the continued execution of our business strategy and furthers the transformation of Endo into a leading global specialty pharmaceutical company," Endo president & CEO Rajiv De Silva said in a statement. "This transaction provides us with greater financial flexibility and better positions the company to take advantage of value-creating M&A opportunities for our pharmaceuticals businesses. As a result of the divestiture, we expect to realize an increase in our revenue growth rate, an improvement in our operating margin profile and a decrease in our overall effective tax rate. I would like to thank all of our AMS colleagues for their continued dedication and efforts in support of the business and its growth. We are confident that the combined expertise, resources and product portfolio of AMS and Boston Scientific will create a leader in the male urological device space dedicated to improving patients’ lives."

Boston Scientific said it will finance the deal through a combination of existing and newly committed credit facilities. BofA Merrill Lynch is Endo’s financial adviser and Skadden Arps Slate Meagher & Flom LLP the legal adviser. J.P. Morgan Securities is financial adviser to Boston Scientific.

Material from Reuters was used in this report.