The transaction will advance Baxter and Hillrom’s expansion into digital and connected care solutions that enable hospital-level care at home
Baxter International has agreed to acquire medical technology firm Hillrom at a purchase price of $156 per share, for a total equity value of around $10.5bn.
Also, the US-based health care company will assume Hillrom’s outstanding debt and cash for a total enterprise value of $12.4bn.
The price of $156 per share is a 7.5% premium to the last closing price of Hillrom’s stock.
Baxter intends to finance the transaction through a combination of cash and fully committed debt financing.
The acquisition is anticipated to result in around $250m of annual pre-tax cost synergies by the end of the third year, said the company.
Baxter chairman, president and CEO José E Almeida said: “Baxter and Hillrom share a common vision for transforming healthcare to better serve all patients and providers.
“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 healthcare 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.”
With the acquisition, Baxter will benefit from Hillrom’s complementary product portfolio and innovation pipeline, and be enabled to provide wide-ranging medical products and services.
The combination will advance both the companies’ expansion into digital and connected care solutions that enable hospital-level care at home or in other care settings.
Baxter said that the acquisition will expand access to Hillrom’s portfolio, along with widening the presence of combined companies and supporting its digital transformation.
Goldman, Sachs & Co. served as a lead financial advisor and BofA Securities as a financial advisor to Hillrom on the transaction.
Perella Weinberg Partners served as a lead financial advisor, and J.P. Morgan and Citi as financial advisors to Baxter and have committed to providing fully committed financing.
Sullivan & Cromwell served as a legal advisor to Baxter, while Wachtell, Lipton, Rosen & Katz served as a legal advisor to Hillrom.
Hillrom president and CEO John Groetelaars said: “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.
“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.
“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.”