Baxter International Inc. (NYSE:BAX) entered into a definitive agreement to acquire Hill-Rom Holdings, Inc. (NYSE:HRC) (“Hillrom”) for $10.4 billion on September 1, 2021. Upon completion of the transaction, Baxter will pay $156.00 in cash for each outstanding share of Hillrom common stock. Baxter will also assume Hillrom's outstanding debt and cash. As a result of transaction, Hill-Rom will become a wholly owned unit of Baxter. The transaction represents a premium of 26.0% to the $123.78 closing price per share of Hillrom common stock on July 27, 2021, 34.5% to the $115.99 price per share of Hillrom common stock based on the volume weighted average price per share of Hillrom common stock for the thirty (30)-trading day period ended July 27, 2021, 92.2% to the $81.17 closing price per share of Hillrom common stock on September 24, 2020, and 7.5% to the $145.06 closing price per share of Hillrom common stock on September 1, 2021. Baxter will finance the transaction through a combination of cash and fully committed debt financing. Baxter will finance the transaction with fully committed bridge facility of $11.4 billion and will secure a permanent debt financing prior to close. On September 30, 2021, Baxter entered into a new term loan credit agreement with various lenders and JPMorgan, as administrative agent, pursuant to which a syndicate of financial institutions have committed to provide Baxter with a senior unsecured term loan facility in an aggregate principal amount of $4 billion and this has replaced a corresponding amount of the commitments in respect of the bridge facility, as a result, there are now $7.4 billion in bridge facility commitments remaining. In case of termination of the transaction Hillrom will pay Baxter a fee of $367 million. Baxter will pay a termination fee of $420 million in case the transaction is terminated under specified circumstances.

The transaction is subject to the approval of Hillrom shareholders; the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; the receipt of other specified regulatory approvals; and the satisfaction of other customary closing conditions. The Boards of Directors of both companies have unanimously approved the acquisition. Hillrom board of directors unanimously recommends that Hillrom shareholders vote “FOR” the proposal to approve the merger agreement. Hillrom shareholders approve transaction at a special meeting. Based on a preliminary tabulation of shareholder vote, approximately 99% of all votes cast, which represents approximately 70% of all outstanding shares on October 18, 2021, record date for special meeting, were voted in favor of merger. Transaction is expected to close by early 2022. The transaction is expected to close in 2021 or early 2022. Baxter expects the combination to result in approximately $250 million of annual pre-tax cost synergies by the end of year three. On October 4, 2021, a purported Hillrom shareholder filed a lawsuit against Hillrom and the current members of the board of directors of Hillrom (the “Hillrom Board”) alleging that the preliminary proxy statement filed by Hillrom on October 1, 2021 in connection with the merger contained alleged material misstatements and/or omissions in violation of federal law. The lawsuit is captioned O'Dell v. Hill-Rom Holdings, Inc., et al. , Case 1:21-cv-08171 and is pending in the United States District Court for the Southern District of New York. On October 8, 2021, another lawsuit was filed against the same defendants asserting similar claims. The lawsuit is captioned Ciccotelli v. Hill-Rom Holdings, Inc., et al. , Case 1:21-cv-08327 and is pending in the United States District Court for the Southern District of New York. On October 12, 2021, two additional lawsuits were filed by purported Hillrom shareholders against the same defendants asserting similar claims; the first lawsuit is captioned Osborne v. Hill-Rom Holdings, Inc., et al. , Case 1:21-cv-08396 and is pending in the United States District Court for the Southern District of New York, and also named a former member of Hillrom's board of directors as a defendant; the second lawsuit is captioned Collins v. Hill-Rom Holdings, Inc., et al. , Case 1:21-cv-05699 and is pending in the United States District Court for the Eastern District of New York. Following the filing of the Proxy Statement with the SEC, six additional lawsuits were filed in various federal courts in connection with the Merger between October 25, 2021 and November 15, 2021. On October 25, 2021, a purported Hillrom shareholder filed a lawsuit against Hillrom and the current members of the Hillrom Board alleging that the Proxy Statement contained alleged material misstatements and/or omissions in violation of federal law. The lawsuit is captioned Leible v. Hill-Rom Holdings, Inc., et al. , Case 1:21-cv-05681 and is pending in the United States District Court for the Northern District of Illinois. On November 3, 2021, a purported Hillrom shareholder filed suit against the same defendants asserting similar claims. The lawsuit is captioned Jeweltex Manufacturing Inc. Retirement Plan v. Hill-Rom Holdings, Inc., et al. , Case 1:21-cv-09090 and is pending in the United States District Court for the Southern District of New York. On November 11, 2021, a purported Hillrom shareholder filed suit against the same defendants asserting similar claims. The lawsuit is captioned Thompson v. Hill-Rom Holdings, Inc., et al. , Case 1:21-cv-09330 and is pending in the United States District Court for the Southern District of New York. On November 12, 2021, two additional lawsuits were filed by purported Hillrom shareholders against the same defendants asserting similar claims; the first lawsuit is captioned Dunphy v. Hill-Rom Holdings, Inc., et al. , Case 1:21-cv-09371 and is pending in the United States District Court for the Southern District of New York; the second lawsuit is captioned Whitfield v. Hill-Rom Holdings, Inc., et al. , Case 2:21-cv-05004 and is pending in the United States District Court for the Eastern District of Pennsylvania. On November 15, 2021, a purported Hillrom shareholder filed suit against the same defendants asserting similar claims.

Perella Weinberg Partners LP is acting as lead financial advisor to Baxter. J.P. Morgan and Citigroup Global Markets Inc. are also serving as financial advisors to Baxter and have committed to provide fully committed financing. Frank Aquila, Melissa Sawyer, Ari B. Blaut, Davis J. Wang, Mehdi Ansari, Mark Schenkel, Heather L. Coleman, Kristen B. Klein, Matthew J. Brennan, Renata Hesse, Michael Rosenthal, and Foad Hoseinian of Sullivan & Cromwell LLP are serving as legal advisors to Baxter. Goldman, Sachs & Co. LLC is serving as lead financial advisor and fairness opinion provider and BofA Securities, Inc. is serving as financial advisor and fairness opinion provider to Hillrom. Adam O. Emmerich, Sabastian V. Niles, Christina C. Ma, Joseph D. Larson, Erica E. Bonnett, Emily D. Johnson, Eiko Stange, Selwyn B. Goldberg and Mark A. Stagliano of Wachtell, Lipton, Rosen & Katz are serving as legal advisors to Hillrom. David A. Klein, Daniel Wolf and Steven Y. Li of Kirkland & Ellis acted as legal advisors to Perella Weinberg Partners. Innisfree M&A Inc. acted as proxy solicitor for Hillrom and Innisfree will receive fee of $25,000 for the service. Hillrom has agreed to pay BofA Securities an aggregate transaction fee of approximately $11 million, $1.5 million of which was payable upon delivery of its opinion and the remainder of which is contingent upon consummation of the merger. Hillrom will pay Goldman Sachs a transaction fee of approximately $86 million, all of which is contingent upon consummation of the merger.

Baxter International Inc. (NYSE:BAX) completed the acquisition of Hill-Rom Holdings, Inc. (NYSE:HRC) on December 13, 2021. Giuseppe Accogli, formerly Baxter's senior vice president and president, Americas and Global Business Units, has been recently named to the newly established role of executive vice president and chief operating officer. Additionally, in connection with the acquisition close, Baxter's board of directors has appointed Nancy M. Schlichting, retired president and chief executive officer of Henry Ford Health System, to the Baxter board. The transaction is expected to be low double-digit accretive to Baxter's adjusted earnings per share (EPS) in the first full year post close, increasing to more than 20% by the third year following closing. Patrick Ryan, William Sheehan, Dean Masuda, Roman Ibragimov, Kevin Perron David Azarkh and Asha Amin of Simpson Thacher represented JPMorgan in connection with $11.4 billion of committed financing to Baxter International Inc.