Illinois firm to acquire Welch Allyn parent in $10.5 billion deal

Hill-Rom Holdings, Inc. in June 2015 announced plans to acquire Welch Allyn for about $2.05 billion in cash and stock. Nearly three years later, Hillrom formally dedicated a $12.7 million expansion project that added about 100,000 square feet to the Welch Allyn campus.

Welch Allyn employs about 1,000 people in Skaneateles Falls, according to CNYBJ Research.

The boards of directors of both Baxter and Hillrom have unanimously approved the acquisition. The transaction is subject to the approval of Hillrom shareholders and the satisfaction of customary closing conditions, including regulatory approvals. The transaction is expected to close by early 2022, per a news release on the Baxter website.

Upon completion of the acquisition, Baxter will pay $156 in cash for each outstanding share of Hillrom common stock for a total purchase price of $10.5 billion. Baxter will also assume Hillrom’s outstanding debt and cash, for a total enterprise value of $12.4 billion. The purchase price represents a 26 percent premium to Hillrom’s closing stock price on July 27, the last trading day prior to media reports speculating about a potential transaction, Baxter noted.

The combination is expected to accelerate the companies’ expansion into digital and connected-care solutions that are increasingly enabling patients with access to hospital-level care at home or in other care settings.

“Baxter and Hillrom share a common vision for transforming healthcare to better serve all patients and providers,” José (Joe) Almeida, Baxter’s chairman, president and CEO, said in the release. “Patients increasingly want to receive their care at home or nearby, while hospitals and other care providers are increasingly using digital health technologies to expand access, improve quality and lower costs. Baxter and Hillrom are uniting to meet the challenges of a rapidly evolving global health-care landscape, while also creating significant value for all the stakeholders we serve. We’re very excited to welcome the Hillrom team to Baxter, and to join together to advance our mission to save and sustain lives.”

“We are proud of the steps we have taken to transform Hillrom into a medical technology leader with an innovative portfolio of connected-care solutions,” John Groetelaars, president and CEO of Hillrom, said. “Today’s milestone announcement represents a win-win for all stakeholders. Patients and caregivers will benefit from enhanced capabilities across the continuum of care, our shareholders will receive a significant and immediate premium for their investment, and our employees will benefit from being part of a larger, stronger company with accelerated growth opportunities. Baxter is the ideal partner to enhance our global reach and realize the true potential of our vision to accelerate medical innovation around the world. With our shared patient-centric cultures, we look forward to seamlessly bringing our two companies together.”