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Baxter to acquire Hillrom in all-cash deal with enterprise value of about $12.4 billion

Baxter International Inc.
BAX,
+4.57%

said Thursday it has entered an agreement to acquire fellow medical technology company Hill-Rom Holdings Inc. for $156 a share, in a deal with an enterprise value of about $12.4 billion. Hillrom, based in Chicago, “brings a highly complementary product portfolio and innovation pipeline that will enable Baxter to provide a broader array of medical products and services to patients and clinicians across the care continuum and around the world, facilitating the delivery of healthcare that is patient- and customer-centered and focused on improving clinical outcomes,” Baxter said in a statement. The $156-a-share purchase price is equal to a 26% premium over Hillrom’s closing stock price on July 27, the last trading day before media reports speculating on a possible transaction. Deerfield, Illinois-based Baxter will finance the deal using a mix of cash and debt financing, It expects the deal to result in about $250 million of annual cost synergies by the end of year three and to boost adj. EPS by low double-digits in the first full year after close. The deal is expected to close early in 2022. Baxter said it will reschedule an investor day planned for Sept. 20 to update its guidance, but expects sales to grow 4% to 5% compounded annually from 2021 to 2024. Hillrom shares jumped 3.3% premarket, while Baxter was up 0.9%.

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