Hill-Rom to acquire devicemaker Welch Allyn in $2B deal: 15 things to know

By September 2015, Hill-Rom plans to have completed its acquisition of Welch Allyn, combining two leading healthcare technology companies with the promise of improved innovation and revenue generation.

Here are 15 things to know about the deal and the new combined company.

1. Through the acquisition, Hill-Rom reports it aims to play a greater role in improving patient care globally, achieve greater levels of efficiency and reduce healthcare costs for customers.

2. The two companies have nearly two centuries of medical device manufacturing experience between them.

3. The two companies plan to leverage their respective infrastructures and product portfolios to provide physicians and other caregivers with improved diagnostics, sensing and patient monitoring technologies.

4. The combined company will operate in more than 30 countries and employ more than 10,000 people.

5. Hill-Rom expects the combined company will have $2.6 billion in revenues and generate more than $500 million in adjusted EBITDA.

6. Hill-Rom expects the transaction to be more than 10 percent accretive to adjusted earning per share in 2016.

7. Hill-Rom expects the cash flow generation of the combined company will allow it to deliver to below 3.5 times adjusted EBITDA by the end of fiscal year 2017, compared to 4.5 times at closing.

8. Hill-Rom anticipates achieving annual run-rate cost savings of at least $40 million by 2018, primarily through a combination of facility optimization, procurement efficiencies and general and administrative expense reductions.

9. Under the terms of the agreement, Welch Allyn shareholders will receive $1.625 billion in cash and approximately 8.1 million newly-issued shares of Hill-Rom common stock.

10. The transaction will be completed by September 2015, at which point Welch Allyn shareholders will own approximately 13 percent of the combined company.

11. No single Welch Allyn shareholder will own approximately more than 1 percent of Hill-Rom equity.

12. Hill-Rom's expectations for the third quarter include reported revenue growth of 13 to 15 percent and adjusted earnings per diluted share to be between $0.58 to $0.61.

13. Hill-Rom's expectations for the full fiscal year 2015 include reported revenue growth of 10 to 11 percent, adjusted earnings per diluted share expected to be between $2.50 to $2.54 and cash flow from operation expected to be approximately $250 million.

14. John J. Greisch will continue to serve as president and CEO of the combined company.

15. Hill-Rom expects certain members of Welch Allyn's senior management to join the combined company.

More articles about health IT acquisitions:

25 things to know about Cigna
Federal contracts a draw to health IT companies
10 latest headlines from health IT's biggest players

 

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars

>