Hill-Rom plans over $2.7 billion of debt financing for Welch Allyn buy

By Sara Rosenberg

New York, June 17 – Hill-Rom Holdings Inc. has received a commitment for a $2,225,000,000 senior secured credit facility and a $500 million senior unsecured bridge loan to help fund its acquisition of Welch Allyn Inc., according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

Goldman Sachs Bank USA is the lead bank on the financing.

The credit facility consists of a $500 million revolver, a $1 billion term loan A and a $725 million term loan B.

Under the agreement, Welch Allyn is being bought for about $1,625,000,000 in cash and around 8.1 million newly issued shares of Hill-Rom common stock. The total transaction value is $2.05 billion.

Closing is expected before the end of September, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Hill-Rom expects the combined company to have $2.6 billion in revenues and generate more than $500 million in adjusted EBITDA.

Leverage will be 4.5 times; however, the company expects to delever to below 3.5 times adjusted EBITDA by the end of fiscal 2017 due to anticipated strong cash flow generation.

Hill-Rom is a Chicago-based medical technology company. Welch Allyn is a Skaneateles Falls, N.Y.-based manufacturer of medical diagnostic equipment.

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