Chicago-based Hill-Rom to acquire Mortara Instrument

$330 million deal to close this quarter

Mortara Instrument recently completed a new production facility near its headquarters in Milwaukee.

Milwaukee-based Mortara Instrument Inc. will be acquired by Chicago-based Hill-Rom Holdings Inc. in a $330 million cash deal, the two companies announced Tuesday.

Mortara Instrument recently completed a new production facility near its headquarters in Milwaukee.
Mortara Instrument recently completed a new production facility near its headquarters in Milwaukee.

Mortara designs, develops and manufactures diagnostic cardiology and patient monitoring solutions. The company was founded in 1982 and today has more than 400 employees globally. In 2016, Mortara had approximately $115 million in revenue and a 55 percent gross margin.

Hill-Rom had almost $2.7 billion in revenue in fiscal 2016. The global medical technology company has 10,000 employees worldwide.

John Greisch, Hill-Rom president and chief executive officer, said Mortara would immediately strengthen the company’s Welch Allyn franchise.

“With Mortara, we will expand our diagnostic cardiology franchise in the acute care, clinical research and primary care settings, where we will use our global commercial presence to accelerate growth of the Mortara business,” Greisch said.

Mortara CEO Justin Mortara plans to join Hill-Rom and continue in a leadership capacity at the company. He will report to Hill-Rom Front Line president Alton Shader. The headquarters of Mortara is expected to stay in Milwaukee.

“By combining with Hill-Rom, Mortara Instrument will have greater opportunities to grow as part of a global leader with strong brand equity and unparalleled care setting expertise,” Mortara said. “Hill- Rom and Mortara Instrument share similar patient-centric cultures, and I am confident that this combination will benefit our valued employees and customers.”

Hill-Rom plans to structure the acquisition to qualify for a tax benefit of approximately $40 million, reducing the effective purchase price to around $290 million.

The deal will be financed with cash and existing credit facilities and is expected to close during the current quarter, the second of Hill-Rom’s fiscal year.

Hill-Rom projected the deal would benefit its adjusted earnings “modestly” in 2017 and said additional operational cost synergies of at least $10 million would result in more benefits in the future.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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