Analysts are pleased with Hillrom’s (NYSE:HRC) position following a proxy statement last week as the company nears its merger with Baxter (NYSE:BAX).
Baxter announced last month that it agreed to buy Hillrom for approximately $12.4 billion, with Hillrom shareholders set to receive $156 per common stock share as the company will survive the merger as a direct, wholly-owned subsidiary of Baxter.
Hillrom last week posted a proxy statement confirming a special meeting of its shareholders to vote on the proposal to approve the merger agreement. The company said in the statement that the merger can’t be completed unless the shareholders approve, with the company’s board of directors unanimously approving the agreement and unanimously recommending that shareholders vote for it to go through.
Baird analyst Mike Polark said that the $156-per share price target set by the analysts is consistent with Baxter’s offer and they don’t expect a topping bid. Risks in the proposed merger include the impact of COVID-19, elevated capital equipment exposure, debt position, global regulatory complexity and modest revenue seasonality.
Polark added that the company’s internal revenue (4%-7% above The Street) and adjusted EBITDA forecasts (1% to 6% above The Street) do not bring any surprises, as he continues to believe the all-cash Baxter offer “is a good if not great outcome for Hillrom shareholders.” He expects the merger to close in early calendar 2022.