Hill-Rom (Batesville, Indiana) said it has acquired Liko (Lulea, Sweden), a developer of lifts and slings designed for the safe movement of patients, for $183 million.

About half of the purchase price will be paid with cash on hand, Peter Soderberg, president/CEO of Hill-Rom, told investors during a conference call yesterday morning. The other half, he said, would be financed from available lines of credit.

"This is a very straightforward acquisition that adds a high-performing company in perhaps our very closest product adjacency that can quickly supplement and augment our business, not only in Europe and other international markets, but also in North America," Soderberg said.

He said Liko's "versatile array of lifting products" address patient mobilization situations that arise such as the need to reposition a patient in a bed, the need to support a limb, or the need to transfer patients from beds to chairs.

"We believe what differentiates Liko from others in this segment is the quality and breadth of their product line combined with the clinical know-how," Soderberg said. "These are the attributes that drew us to Liko, as they take a very similar approach to their business as Hill-Rom takes to ours."

According to Hill-Rom, the deal is expected to be slightly accretive to Hill-Rom's GAAP earnings per share in 2009 and increasingly accretive thereafter.

"For many years in Europe and more recently in the U.S., there is a very important emphasis placed on caregiver injury prevention," Soderberg said. "Published studies have shown that nurses lift an average of 1.8 tons of weight per shift."

Soderberg further highlighted the patient-lift segment's growth opportunities as a result of this concern: "Certain countries in Europe for many years have had legislation that has mandated that patient lifts be available in hospitals, it is only more recently in the U.S. that no-lift mandates are working their way into legislative agendas. Nearly 20 states have enacted or introduced legislation aimed at eliminating manual patient lifts and transfers, these legislative developments, combined with the new CMS rulings that include a focus on no falls, really underpin the potential in this segment. I think you can quickly see the potential for growth in this category, we certainly can."

From a financial perspective, Soderberg said, the Liko acquisition will immediately add more than $75 million of revenue to Hill-Rom's top line.

But one listener on the call who identified himself as one of Hill-Rom's largest investors, was unhappy with the lack of details the company provided about the deal.

"I think we deserve better disclosure here ... you're basically getting on the call saying 'trust us.' By my numbers, $183 million buyback of shares would be roughly 9% accretive on your '08 expectations and about 8% on '09, so how is this better?" he asked.

Hill-Rom CFO Greg Miller responded that in regard to this transaction the company has been "very transparent with regard to our capital deployment priorities, and those include share repurchases on opportunistic basis, but also include strategic acquisitions ... the utilization of cash is really focused on the long-term value of shares and we feel that this will provide a better return in the long term."

Soderberg also responded, saying that "the board spent a lot of time with us understanding the accretive nature of this transaction and we feel like we've done a transaction that is very accretive to the company over the intermediate term."

But when the investor asked, "Then why don't you show us the numbers today," Soderberg said, "It's a private company and we don't feel the need to fully disclose all the details of the transaction." He added that the company would talk more during its investor day in New York next week about its overall expectations.

The acquisition of Liko also fits within Hill-Rom's strategic vision that it first outlined in 2006, Soderberg said, "As it represents both a targeted growth opportunity and an expansion of Hill-Rom's offerings, particularly in the post-acute care segment."

The deal also meshes with Hill-Rom's desire to leverage its global business footprint across the continuum of care, Soderberg said, because nearly 75% of Liko's revenue is derived outside of North America.

Liko, which has been a family business for more than 25 years, employs about 275 people worldwide.

Evli Bank acted as financial advisor to Hill-Rom and Ernst & Young acted as financial advisor to the sellers. Vinge and Bracewell & Giuliani served as legal advisors to Hill-Rom and Cederquist served as legal advisor to the sellers.

In other dealmaking activity:

• Owens & Minor (O&M; Richmond, Virginia) said it has acquired certain assets and liabilities of The Burrows Co. (Wheeling, Illinois), a private distributor of medical and surgical supplies to the acute-care market.

The deal was first disclosed last month when O&M agreed to pay $30.2 million for the net assets of Burrows and said it would assume the company's debt (Medical Device Daily, Aug. 21, 2008).

• VWR International (West Chester, Pennsylvania), a global laboratory supply company, said it has acquired Omnilab (Mattmenstetten, Switzerland), a scientific laboratory supply distributor.

Omnilab was founded in 1990 and is one of Switzerland's largest independent suppliers of laboratory equipment and consumables, according to the company.

• Physicians Interactive (Chicago), a provider of e-marketing solutions for pharmaceutical, biotech and medical device companies, said it has been acquired by a fund managed by Perseus (Washington) from Allscripts Healthcare Solutions (also Chicago).

Additionally, Physicians Interactive and Allscripts have signed a two-year collaboration agreement committing both parties to explore opportunities and potentially co-develop mutually beneficial business products and services involving the EHR and e-prescribing solutions.

• PPD (Wilmington, North Carolina) said it has completed the acquisition of InnoPharm (Smolensk, Russia), strengthening its ability to offer Phase II-IV clinical trials support, data management and biostatistics services in Eastern Europe.

InnoPharm has worked as a subcontractor for PPD since 2004. PPD is a global contract research organization providing discovery, development and post-approval services as well as compound partnering programs.