Hill-Rom floats $425m debt offering for Welch-Allyn buy

Hill-Rom Holdings launched a $425 million round of debt financing to support its pending $2.05 billion purchase of Welch Allyn and its portfolio of point-of-care diagnostic devices, according to an SEC filing.

The cash-and-stock deal is slated to leave privately owned Welch Allyn’s shareholders owning a 13% stake in Hill-Rom. The deal calls for Chicago-based Hill-Rom to pay $1.625 billion and 8.1 million HRC shares for Welch Allyn, which is based in Skaneateles Falls, N.Y.

The acquisition is slated to complete on or before September 30, subject to regulatory approvals, according to the filing.  Hill-Rom did not disclose any other details of the stock offering.

In July, U.S. anti-trust regulators approved Hill-Rom’s acquisition of Welch Allyn. Hill-Rom said the Federal Trade Commission granted early termination of the required waiting period on the deal.

Hill-Rom said  Hill-Rom president & CEO John Greisch will stay on in the corner office for the combined entity, with “certain members” of Welch Allyn’s management staying aboard. Although the new Hill-Rom will still be based in the Windy City, the company said it expects to keep a “substantial” presence in Skaneateles Falls and Welch Allyn’s footprint in Tijuana. The new company is expected to bring in $2.6 billion in annual sales and throw off earnings of more than $500 million before interest, taxes, debt & amortization.

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