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Baxter in Advanced Talks To Acquire Medical Equipment Maker Hill-Rom for $10 Billion

The proposed transaction would value Hill-Rom at about $150 per share.

Video source: YouTube, Hillrom

Baxter International Inc (NYSE: BAX ) is reportedly in advanced talks to acquire medical equipment maker Hill-Rom Holdings Inc (NYSE: HRC ) for about $10 billion and a deal could be reached by mid-week. 

Citing sources familiar with the matter, The Wall Street Journal reported on Sunday that the transaction would value Hill-Rom at around $150 per share, a 13% premium to the stock’s closing price of $132.90 on Friday.

Bloomberg News reported that Hill-Rom rejected Baxter's initial $144-per-share bid ($9.6 billion) one month ago, and it was expected that Baxter would return with a higher bid. 

Founded in 1915, Chicago-based Hill-Rom manufactures medical gear including hospital beds, operating tables and patient monitoring devices.

Baxter, which is a medical technology company headquartered in Deerfield, a Chicago suburb, has a market value of around $38 billion.

According to MedTech Dive, analysts are skeptical of a potential union and are unsure if investors will be behind it. 

"While Hill-Rom is improving its product portfolio, adding value with connected care, and continuing to expand internationally, we see some, but not an overwhelming strategic benefit," according to analysts from JPMorgan Chase & Co. 

Baxter and Hill-Rom did not comment on The Wall Street Journal’s report.

The transaction would be the latest tie-up in the US healthcare sector as medical device and supply companies seek to consolidate in order to sell a wider range of products to hospital clients, Bloomberg noted.

Healthcare acquisitions have totaled $399 billion year-to-date, more than double last year’s pace, according to The Journal.


Source: Equities News

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