Batesville Herald Tribune, Batesville, Indiana

April 11, 2014

Hill-Rom acquires Virtus

Debbie Blank The Herald-Tribune
The Batesville Herald-Tribune

---- — After buying Virtus products for 21 years – and for the past 16 years from its Batesville-based location – Hill-Rom leaders decided to acquire the supplier, reported Larry Baumann, Hill-Rom, Chicago, global communications executive director. Financial terms were not disclosed.

The acquisition was final April 1. Virtus operations now report to Valerie Finarty, Hill-Rom vice president of supply chain operations, he added.

Virtus, with annual revenue of $18-19 million, is located at 1896 Lammers Pike, Batesville, she said. The facility had been privately held and majority owned by DCC PLC, Dublin, Ireland, which was founded by Jim Flavin as a venture and development capital company in 1976.

The supplier manufactures finished surfaces for hospital beds and stretchers, plus several hundred components that go into Hill-Rom made surfaces, including a topper, mattress cover and air bladders that go inside some mattresses. The vice president explained, “Hospitals are increasingly looking for bladders that inflate and deflate” to turn a patient over and help prevent wounds.

Finarty observed, “I’m thrilled the Virtus team is going to be part of Hill-Rom. I think they’re a great addition. They have a lot of experience and a lot of knowledge about things we can do better. The focus on quality and ongoing fulfillment to our customers is going to be critical in the coming months.”

Virtus veteran manager John Miller, now Hill-Rom director of Virtus operations, is part of her team. He commented the acquisition “is a good thing for Hill-Rom and also for Virtus. I think integrating our skills here will help Hill-Rom and ... their mattress line.”

“We’re a close-knit team at Virtus,” he reflected. When the announcement was made at the plant April 1 by Finarty; Scott Jeffers, Hill-Rom global supply chain senior vice president; and John Leonard, one of the DCC owners, “overall there was a huge shock.” Leonard, who had been visiting the facility about every six weeks, “came through and talked to everybody. It was an emotional farewell.”

Once the news sunk in, “we realize it makes sense and we can be a huge advantage to the Hill-Rom team and we’re glad to be with” the company, according to Miller.

The idea to purchase Virtus “was discussed at a high level,” said Finarty, a three-year Hill-Rom employee. “They’re such a strategic supplier of ours (we thought), ‘Wouldn’t it be great if we were all one family?’ Typically, Virtus workers had been delivering products to Hill-Rom daily and asking what was needed.

Hill-Rom executives wanted to buy this supplier because “the products and components Virtus makes are strategic to our customers and our own portfolio,” Finarty explained. “Customers are increasingly looking at and wanting improved therapies, and the knowledge base and talent at Virtus helps us to provide better products and therapies for our customers. In addition, it allows us to vertically integrate,” which helps control the quality and cost and lets Hill-Rom be more flexible for customers.

Another advantage of the acquisition is “it does allow us to expand our employee presence in Batesville.”

About 95 – 65 hourly and 30 salaried – work at the Virtus plant. The two other Hill-Rom plants in Batesville are larger, Selke with around 120 and Ritter with 350, according to Finarty.

“Short term we don’t anticipate day-to-day changes on either side. Over time, we do expect there to be some efficiencies between the ... sites. We expect to see some deeper integration.”

Miller said the Virtus plant now runs Monday through Thursday. “We actually have an integration team that will work together on figuring out how we move forward.”

Finarty believed the new Hill-Rom associates from Virtus will benefit by being part of a larger company and like its perks. She predicted, “They will enjoy collaborating with Hill-Rom employees in a more direct manner.”

The vice president is hopeful the Virtus workers will continue to focus on day-to-day operations. “I know they have a ton of questions and we’re trying to get answers to those.”

Debbie Blank can be contacted at debbie.blank@batesvilleheraldtribune.com or 812-934-4343, Ext. 113.

Adding assets • This is Hill-Rom's fifth acquisition in five years, after the company purchased Encompass TSS in 2010, Liko in 2011 and Volker and Aspen Surgical in 2012.