Hill-Rom Pays $250 Million for Trumpf Medical

Coming off a difficult 2013, hospital-equipment manufacturer Hill-Rom has more than doubled its surgical portfolio, completing the $250 million acquisition of German manufacturer Trumpf Medical. Trumpf Medical, the medical unit of the privately held Trumpf Group, brings its line of operating-room infrastructure products to the deal, which closed Friday. It's a move that Hill-Rom officials hope will boost sales to existing customers and expand its global market, according to a Hill-Rom news release.The acquisition follows financial difficulties in 2013 that resulted in a restructuring for Hill-Rom (Batesville, IN). Revenue for the quarter that ended Dec. 31, 2013 declined 8% versus the prior year, knocking adjusted diluted earnings per share down 33% to $0.36 compared to $0.54 in 2012. The company faced significant difficulty in the domestic sector. Its revenue from U.S. sales fell 12% to $206 million.In the opening weeks of the 2014, a burst of investor optimism drove Hill-Rom's share prices up to their 52-week high of $44.64 per share. Then came the quarterly report. In two days of trading, Hill-Rom lost 16% of its value. CEO John Greisch blamed "inherent volatility" and "challenges in [Hill-Rom's] capital equipment markets." Hill-Rom announced it would cut approximately 350 employees, or 5% of its global workforce, to save roughly $30 million annually. The restructuring efforts included a downsizing of the firm's European manufacturing capacity and the closure of one facility there. In addition, Hill-Rom said it would streamline operations in both the continent and the United States.

Hill-Rom manufactures scalpels, spine tables, patient-positioning accessories, surgical supplies and fluid management systems. To that mix, Trumpf will add its ceiling-mounted OR equipment management system; LED surgical and procedure lights; an in-light high definition camera; "no-lift" patient and equipment transport equipment; flexible, modular surgical tables; and integrated, customized systems for hybrid rooms.Trumpf Medical's revenues for the twelve months ending in June 2014 were approximately $250 million. More than 80 percent came from outside North America, with approximately one-third of revenue in Asia/Pacific, the Middle East, Eastern Europe, and Latin America. In fiscal year 2015, Hill-Rom expects Trumpf Medical to add approximately $0.12 - $0.15 per share in adjusted earnings.

Nancy Crotti is a contributor to Qmed and MPMN.

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