Hill-Rom raises outlook after $2B Welch Allyn buy

Hill-Rom Holdings (NYSE:HRC) today raised its earnings outlook for its fiscal 4th quarter and full year 2015, a little more than 2 weeks after closing its $2.05 billion acquisition of Welch Allyn.

Chicago-based Hill-Rom said it now expects adjusted 4th-quarter EPS of 80¢ to 82¢, up from prior guidance of 76¢ to 79¢. Full-year adjusted EPS are now pegged at $2.55 to $2.57, up from $2.51 to $2.54.

Fourth-quarter sales are forecast to be $$545 and $555 million, with full-year sales expected to come in at $1.96 billion to $1.97 billion, the company said. That would represent sales growth of 16.0% to 16.6% over fiscal 2014, when Hill-Rom put $1.69 billion on the top line of the ledger.

“Hill-Rom, with its diversified portfolio of medical technologies, is better positioned for success than at any point in our history,” president & CEO John Greisch said in prepared remarks. “Our focus on growth and on enhancing outcomes for patients and their caregivers, combined with a rigorous focus on increasing earnings and cash flow, is designed to significantly enhance shareholder value.”

Hill-Rom closed the cash-and-stock deal Sept. 8, sending Skaneateles Falls, N.Y.-based Welch Allyn $1.63 billion in cash and some 8.1 million shares of new HRC stock. The deal leaves privately owned Welch Allyn’s shareholders owning a 13% stake in Hill-Rom, which floated a $425 million debt round to help finance the buyout. U.S. anti-trust regulators OK’d the merger in July.

Today Hill-Rom said it’s targeting organic annual sales growth of 3% to 5% and operating cash flow of more than $1 billion.

HRC shares were down -1.5% to $56.43 apiece today in mid-day trading.

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