One of the Biggest Medtech Deals of 2021 Is Now Complete

One of the largest deals medtech has seen in 2021 has just closed. Baxter International said it completed its acquisition of Hillrom for $12.5 billion.

Talk of the merger had been brewing since late August. However, Deerfield, IL-based Baxter made its intention to acquire Hillrom public in September. Baxter said the combination to result in approximately $250 million of annual pre-tax cost synergies by the end of year three. This estimate excludes any benefit from potential new revenue growth opportunities resulting from the combination of the two organizations.

Hillrom is expected to be low double-digit accretive to Baxter’s adjusted earnings per share (EPS) in the first full year post-close, increasing to more than 20% by the third year following closing.

“The Baxter-Hillrom combination unlocks the next phase of our transformation, presenting a new wave of potential to drive greater impact for patients, clinicians, employees, shareholders and other communities we serve worldwide,” said José (Joe) E. Almeida, Baxter’s chairman, president and CEO. “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.”

The merger has the potential to expand access to Hillrom’s portfolio globally; broaden the presence of the combined companies across sites of care and accelerate and strengthen the combined organization’s digital transformation.

Acquiring Hillrom also gives Baxter access to Seattle, WA-based Bardy Diagnostics’s CAM Patch, a device designed to promote patient compliance, streamline clinical workflow, and yield clinically actionable data in a report. BardyDX’s CAM Patch was one of 16 COVID-19 innovations spotlighted by MD+DI in a special report in May of 2020. 

Recall that in July, a court ordered Hillrom to continue its $375 million acquisition of Bardy Diagnostics. Hillrom wanted to back out of the proposed merger, which was first announced in January, because it claimed Medicare rate cuts for long-term cardiac monitoring constituted a material adverse event in the acquisition agreement.

However, In August Hillrom would indeed finalize the acquisition of Seattle, WA-based Bardy Diagnostics, according to a filing with the SEC.