St. Paul, Minn.-based EnteroMedics Inc. acquired ReShape Medical Inc. in San Clemente for $61 million cash and stock. ReShape makes a Food and Drug Administration-approved intragastric balloon designed to treat obesity patients with a body mass index between 30 and 40. The single-use gastric balloon inflates when it reaches the stomach, resulting in the patient feeling fuller and eating less.

Reshape has 55 employees.

Entero Chief Executive Dan Gladney said the acquisition is crucial to Entero building out a comprehensive portfolio to provide full continuum of care to patients with obesity.

The transaction is comprised of $5 million cash, which will be immediately used to pay ReShape’s outstanding debt, and over 21 million shares of common stock—including 187,772 shares of series C convertible preferred stock that will be convertible into nearly 19 million shares of common stock upon EntereoMedics stockholder approval.