2014 changed the landscape of the medical device industry. We had the mega Covidien acquisition by Medtronic, the acquisition of CareFusion and a smaller company Crisi Medical by Becton Dickinson, and then of course the acquisition of Siemens Medical Systems (Malvern, PA), by Cerner.
Now Hill Rom is expanding into the point of care diagnostic market. It will be real interesting to see how this convergence happens. 2015 seems to be starting off with more of the consolidation change.
Hill-Rom Holdings, a maker of hospital equipment, wound-care and surgical products, said it would buy privately held Welch Allyn for about $2.05 billion to expand into the point-of-care diagnostics market.
Welch Allyn makes medical equipment that allow physicians to carry out diagnostic tests at or near the site of patient care.
Welch Allyn shareholders will receive $1.625 billion in cash and about 8.1 million newly-issued shares of Hill-Rom common stock.
At the closing of the deal, expected in September, Welch Allyn's 75 shareholders will own about 13 percent of the combined company.
The combined company is expected to generate revenue of $2.6 billion and over $500 million in Adjusted EBITDA, Hill-Rom said.
The acquisition is expected to add over 10 percent to Hill-Rom's 2016 adjusted earnings.