Baxter to Acquire Hillrom At $156/Share: See The Highlights - Baxter Intl (NYSE:BAX)

Baxter International Inc BAX has agreed to acquire Hill-Rom Holdings Inc HRC for $156.00 per share in cash, slightly higher than the earlier anticipated $150.
Related Content: Baxter In Advanced Talks For $10B Hill Rom Buyout
The deal values HRC's equity at approximately $10.5 billion and a total enterprise value of roughly $12.4 billion, including the assumption of debt.
The purchase price represents a 26% premium to Hillrom's closing stock price on July 27, the last trading day before media reports speculating about a potential transaction.
Baxter expects the combination to result in approximately $250 million of annual pre-tax cost synergies by the end of year three.
The transaction is expected to be low double-digit accretive to Baxter's adjusted earnings per share in the first full year post-close, increasing to more than 20% by year three.
The transaction is also expected to expand Baxter's overall adjusted EBITDA margins over the medium-term and deliver strong cash flow generation with a high single-digit return on invested capital expected by year five.
Baxter will finance the transaction through a combination of cash and debt financing. As of June 30, cash and cash equivalents stood at around $3.1 billion (See June 10Q here).
At closing, Baxter estimates that it will have net leverage of approximately 4.2x net debt to pro forma adjusted EBITDA of the combined companies.
The transaction is expected to close by early 2022.
Price Action: HRC stock is up 3.82% at $150.06, and BAX stock is up 1.55% at $78.80 during the premarket session on the last check Thursday.

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