DEERFIELD, Ill. -- Medical products company Baxter International will acquire medical technology firm Hillrom for $10.5 billion in cash, the companies announced Thursday. Baxter will also absorb Hillrom's debt and cash, bringing the total value of the deal to $12.4 billion.

       Baxter will pay Hillrom shareholders $156 per share, a 26% premium on its closing price on July 27, when speculation about a deal began to spread. Hillrom shares closed at $145.06 on Thursday and were up more than 3% in premarket trading, to $149.75.

       Deerfield, Illinois-based Baxter, which offers essential hospital products including dialysis, IV solutions and other therapies and devices, had sales of $11.7 billion in 2020, with projected sales of $12.6 billion this year.

       Hillrom, headquartered in Chicago, is focused on medical technology products and services such as smart beds, patient monitoring and diagnostic technologies and advanced surgical equipment. It has sales approaching $3 billion annually.

       The deal has been agreed upon by both companies’ boards and is expected to close in early 2022, pending regulatory approval and a vote by Hillrom shareholders.

       Baxter shares rose about 1% in premarket trading, to $78.40.