US medical equipment manufacturer Hill-Rom has signed an agreement to acquire privately held Welch Allyn in a cash and stock deal worth approximately $2.5bn.
Under the agreement, Welch Allyn shareholders will receive $1.625bn in cash and approximately 8.1 million newly-issued shares of Hill-Rom common stock.
On completion of the transaction, Welch Allyn shareholders, a group comprising 75 people, will own approximately 13% of the combined company, with no single shareholder holding more than 1% of Hill-Rom's equity.
Headquartered in New York, US, Welch Allyn is a maker of a diversified portfolio of devices that assess, diagnose, treat and manage a wide variety of illnesses and diseases.
Welch Allyn is claimed to be the only global company focused exclusively on the requirements of frontline care with multiple call points, including primary care physicians, nurses, hospitalists, biomeds and specialists.
Hill-Rom president John Greisch said:"Hill-Rom is at the forefront of improving the healthcare delivery system, and this compelling combination further positions Hill-Rom to play an increasingly important role in improving patient care.
"This is a significant step in our transformational journey, and we are confident that our combination with Welch Allyn advances these objectives and will create a stronger platform from which to deliver significant value creation for our shareholders and other stakeholders."
The companies intend to provide a broad spectrum of innovative solutions to a patient-centric, global customer base focused on quality and efficiency.
Subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions, the transaction is expected to be completed before the end of September 2015.
Image: Welch Allyn manufacturers a medical halogen penlight to observe pupillary light reflex and pharynx. Photo: courtesy of Hanabishi.