By Suzanne Hodsden
Hill-Rom has signed a definitive agreement to acquire Mortara Instrument Inc. for an estimated $330 million. Integration of Mortara’s portfolio is expected to expand and enhance Hill-Rom’s offerings in the diagnostic cardiology and vital sign monitoring markets, as well as accelerate growth for Mortara technology on a global scale.
Hill-Rom completed a $2.05 billion deal to acquire Welch Allyn in 2015, expanding its product offerings beyond hospital beds, patient lifting systems, and surgical equipment, and into point-of-care diagnostics and patient monitoring equipment. At the time, Hill-Rom’s product offerings were represented in a hospital’s long-term capital investment cycle. The shorter life cycle of Welch Allyn’s products offered a more steady revenue source for Hill-Rom, and the integration of the two portfolios complemented a healthcare system that was becoming integrated across the continuum of patient care.
Mortara Instruments will further the expansion Hill-Rom began with the Welch-Allyn deal. Mortara’s three brands — Mortara, Quinton, and Burdick — serve a range of healthcare settings, from acute care to primary care to clinical research, and generated $115 million in revenue in 2016, according to the Milwaukee Business Journal.
The breadth of Mortara’s cardiology diagnostic offerings exceeds Welch Allyn’s offerings in the same space and will greatly enhance Hill-Rom’s presence in that $1 billion global market, stated Hill-Rom CEO John Greisch in a press release. Greisch added that the deal aligns with the company’s strategy to expand clinical focus areas — patient diagnostics and monitoring — leveraging the combined R&D team toward “the rapid commercialization of new products.”
“Our growing Welch Allyn franchises will be immediately strengthened by the addition of Mortara Instrument’s experienced team, breadth of diagnostic cardiology and patient monitoring offerings and best-in-class ability to integrate with electronic medical record (EMR) systems,” said Greisch. “With Mortara, we will expand our diagnostic cardiology franchise in acute care, clinical research and primary care settings, where we will use our global commercial presence to accelerate growth of the Mortara business.”
Mortara Instrument’s current CEO, Justin Mortara, will continue on at Hill-Rom as the company’s portfolio is integrated into Hill-Rom’s Front Line Care division, which also leads the Welch Allyn franchises. Mortara commented that his company will have “greater opportunities to grow as part of a global leader with strong brand equity.”
The patient monitoring market is projected to be worth nearly $25 billion by 2020, according to a report from MarketsandMarkets. Analysts indicate that primary drivers of growth are aging populations, the advancement of point-of-care technology, and government regulations seeking to control rising healthcare costs.
In a recent MDO guest column, analysts from PwC outlined strategies for transitioning from “device manufacturer” to “complete solutions provider,” commenting that device developers are in a unique position to “reach across the healthcare ecosystem to offer services that engage patients in real time and address complex challenges.”