Hill-Rom To Buy Privately-held Welch Allyn In $2.1 Billion Cash And Stock Deal

Hill-Rom Holdings Inc. said Wednesday it has agreed to buy privately-held Welch Allyn Inc. in a cash and stock deal valued at about $2.1 billion. The health care technology companies will develop new technologies for patients and caregivers, Hill-Rom said in a statement. Welch Allyn shareholders will receive $1.625 billion in cash and about 8.1 million newly-issued shares of Hill-Rom. The combined company is expected to have $2.6 billion in revenue and generate more than $500 million in adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA. Hill-Rom expects to deal to immediately boost EBITDA margins and to lift 2016 adjusted per-share earnings by more than 10%. "We believe this combination, which will be accretive to Hill-Rom's adjusted gross and EBITDA margins, will also result in an enhanced financial profile, creating the opportunity for accelerated growth," Hill-Rom Chief Executive John Greisch said in a statement. Shares were not yet active in premarket trade, but are up 15% in the year so far, while the S&P 500 has gained 1.8%.