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Baxter reportedly on verge of acquiring Hill-Rom for $10 billion

by John R. Fischer, Senior Reporter | August 31, 2021
Business Affairs
Baxter International is reported to be in talks to acquire Hill-Rom for about $10 million
Baxter International may be eyeing a potential acquisition of medical equipment manufacturer Hill-Rom Holdings for about $10 billion.

People familiar with the matter told The Wall Street Journal that a deal could be completed by midweek should talks not fall through, and could value Hill-Rom at $150 a share, which is 13% higher than its closing price of $132.90 on Friday.

The company, which develops smart beds and diagnostics and monitoring technologies, has a market value of nearly $9 billion. One product it launched in 2019 was LINQ mobile, a smartphone application designed to strengthen communication among members of care teams. It also teamed up with IMRIS the year before to launch a new OR surgical table designed for cranial and upper-cervical intraoperative MR procedures in the IMRIS Surgical Theatre.

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Baxter also develops a range of medical equipment, from infusion systems to ICU machines, and has a market value of around $37 billion. Earlier this month, it partnered with Amazon Web Services on digitalization, to develop new digital health solutions to personalize care; make healthcare experiences for patients seamless; and modernize its technology capabilities and business processes.

“Our digital transformation will help us advance our mission to save and sustain lives while delivering value to our patients, clinicians, customers and employees,” said Andy Frye, Baxter’s senior vice president of Asia Pacific, and executive sponsor of the company’s digital transformation, in a statement at the time.

Hill-Rom previously said no to a bid from Baxter last month valued at $9.6 billion ($144 a share) on the basis that it was too low, reported Bloomberg. Baxter was expected to up its offer.

Word on its latest offer sent Hill-Rom stock up 4% in Monday’s premarket, according to WSJ. Its total share increase this year has been 36%, almost twice the gain of an S&P 500 index tracking healthcare companies. Baxter, meanwhile, has seen shares dip 7.8%.

Mergers and acquisitions in the U.S. have roughly tripled to close to $2 trillion this year as the economy recovers from the ill effects of the pandemic, reports WSJ. Motivating these deals are desires for scale, especially as stock prices go up, and they have so far amassed $399 billion in the U.S., which was more than double last year’s pace, reports financial marketing platform, Dealogic.

Both companies are located in Illinois, with Hill-Rom in Chicago and Baxter in Deerfield, and both their stocks trade at about 21 times estimated earnings, reports Bloomberg.

Baxter declined to comment on the rumors in an email to Bloomberg. Hill-Rom did not respond for comment.

EDIT: A previous version of this article incorrectly stated the deal would be worth $10 million, rather than $10 billion.

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