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Baxter International completes acquisition of Hillrom for $12.5 billion

by John R. Fischer, Senior Reporter | December 16, 2021
Business Affairs
Baxter International has acquired Hillrom for $12.5 billion
Medtech company Baxter International has acquired Hillrom for approximately $12.5 billion.

The combination of the two creates an estimated $15 billion global medtech company that will expand Hillrom’s and Welch Allyn’s products to new international markets, while allowing Baxter to provide solutions to homes, physicians' offices, ambulatory care centers and nearly every hospital department.

Baxter also will be able to build and introduce solutions in new areas to boost workflow efficiency and care outcomes for healthcare providers, according to José Almeida, Baxter’s chairman, president and chief executive officer, in a statement. “Integrating our complementary capabilities introduces additional opportunities for growth across our broad geographic footprint and also creates remarkable new possibilities for connectivity with leading-edge digital health innovation focused on enhancing care, lowering costs and increasing workflow efficiency.”

Baxter currently has a collective global install base of over two million medical devices, and plans to build a connected system for providers and patients that combines connectivity technology and integration, digital health, data visualization and analytics, therapy development, monitoring and sensing.

The acquisition was announced in September and is expected to provide approximately $250 million in annual pre-tax cost synergies at the end of three years, excluding any benefit from potential new revenue growth opportunities. It also is expected to be low double-digit accretive to Baxter’s adjusted earnings per share in the first full year and increase to more than 20% by the third year. In addition, Baxter’s overall adjusted EBITDA margins are anticipated to expand over the medium term and produce strong cash flow generation with a high single-digit return on invested capital by the fifth year.

As part of the deal, Guiseppe Accogli, Baxter’s former senior vice president and president of Americas and Global Business Units, will be its new executive vice president and chief operating officer. Baxter’s Board of directors has also appointed Nancy Schlichting, retired president and chief executive officer of Henry Ford Health Systems, who served on the Hillrom board of directors, to the Baxter board. She currently is the vice chair of the Duke University Health System board as well.

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