Israel’s Given Imaging this week signed an agreement to acquire Sierra Scientific Instruments for $35 million in cash from healthcare-focused private equity firm Water Street Healthcare Partners. Sierra Scientific develops gastro diagnostic devices. The company expects to close the deal in early April.

Given Imaging, based in the town of Yokne’am in northern Israel, develops the PillCam endoscopic camera for the esophagus, small intestine and colon.

Los Angeles-based Sierra Scientific’s unaudited financial report states that its revenue was $18 million in 2009. The company’s products diagnose a range of gastrointestinal disorders, including gastroesophageal reflux disease.

Given Imaging president and CEO Homi Shamir was quoted by Globes, Israel’s leading financial daily, as saying: “Sierra Scientific is a strong, well managed company respected by the GI community for its cutting-edge products which deliver reliable performance. This acquisition strengthens Given Imaging’s position as the global leader in the gastroesophageal diagnostic market.”

Shamir does not rule out further acquisitions: “We are examining additional things all the time. This is a very good time for acquisitions and Given is a company generating cash and profit.”