TORONTO (Reuters) - India's Jubilant Organosys Ltd (JUBO.BO: Quote, Profile, Research) said on Friday it plans to buy Canada's Draxis Health DAX.TO DRAX.O for about $255 million as it seeks entry into North America's key radiopharmaceutical sector.

Jubilant said it would pay $6.00 a share for all the outstanding shares of the specialty health-care company. Draxis's board has approved the transaction and recommends that shareholders accept the offer.

"Draxis represents a unique opportunity in the North American market, offering Jubilant entry into the attractive, regulated, high-growth and high-margin radiopharmaceutical business," Jubilant said in a release.

"It also enables Jubilant to consolidate its position in the sterile and non-sterile contract manufacturing business."

The two key platforms at Quebec-based Draxis are its Draximage radiopharmaceutical division and its contract manufacturing business.

Competition in the nuclear isotope business was ratcheted up recently after a U.S. company bought a similar operation from Bristol Myers Squibb (BMY.N: Quote, Profile, Research).

The purchase price represents a 22.4 percent premium over Thursday's closing price of $4.90 for a Draxis share on Nasdaq.

Draxis shares were up 99 cents, or 20.2 percent, at $5.89 on Nasdaq following a trading halt. The shares, which were also halted on the Toronto Stock Exchange, were up C$1.01, or 20.5 percent, at C$5.95 when activity resumed.

Draxis has agreed to pay Jubilant a break fee of $10.5 million if the transaction is not completed. Jubilant said it plans to fund the acquisition through a combination of cash-on-hand and debt.