BUSINESS Baxter to Acquire Hillrom, Parent of Welch Allyn By Staff Tuesday, September 7, 2021 12:15 AM DEERFIELD, Ill. and CHICAGO—Baxter International (NYSE:BAX), a leading global medical products company, and Hillrom (NYSE:HRC), a global medical technology leader, announced on Sept. 3 that they have entered into a definitive agreement under which Baxter has agreed to acquire Hillrom for $156 per share in cash for a total equity value of approximately $10.5 billion and a total enterprise value of approximately $12.4 billion, including the assumption of debt. Hillrom 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 health care that is patient- and customer-centered and focused on improving clinical outcomes, the companies said in a statement.The combination is also 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.Hillrom is the parent company of Welch Allyn, a maker of medical devices and patient monitoring systems, including a line of ophthalmic diagnostic products such as the Spot Vision Screener. Hillrom acquired Welch Allyn, based in Skaneateles Falls, N.Y., in 2015.“Baxter and Hillrom share a common vision for transforming health care to better serve all patients and providers,” said José (Joe) E. Almeida, Baxter’s chairman, president and chief executive officer. “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.”John Groetelaars, Hillrom’s president and chief executive officer, 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, 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.”Baxter will finance the transaction through a combination of cash and fully committed debt financing. At closing, Baxter estimates that it will have net leverage of approximately 4.2x net debt to pro forma adjusted EBITDA of the combined companies (as estimated by Baxter management). Baxter is committed to an investment grade credit rating and deleveraging to 2.75x net leverage within two years of closing.The boards of directors of both companies 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.