Dive Brief:
- Industrial equipment manufacturer Hillenbrand has agreed to be acquired by investment firm Lone Star Funds. The deal is valued at $32 per share, which equates to a total value around $3.8 billion.
- “The Board carefully reviewed a range of potential strategic alternatives, including interest from a number of parties, and determined that this transaction is in the best interest of Hillenbrand and its shareholders,” Chairperson Helen Cornell said in a release noting the board unanimously approved the transaction.
- The transaction is expected to close by the end of Q1 2026. Once completed, Hillenbrand will shift from a publicly traded corporation on the New York Stock Exchange to a privately held company.
Dive Insight:
Hillenbrand has spent the last few years adjusting its portfolio to focus on plastics, food and recycling, while also positioning itself as a pure-play industrial company. The manufacturer notched revenue nearing $3.2 billion last year.
Hillenbrand boosted its food production and processing capacity with the acquisitions of Schenck Process’ food and performance materials business for approximately $730 million in September 2023, Peerless Food Equipment in December 2022 for $59 million and food processing company Linxis Group in October 2022.
The manufacturer has also shed segments tangential to its core focus, such as the sale of casket manufacturer Batesville. The business unit went to private equity firm LongRange Capital for $761.5 million in 2022. This year, Hillenbrand divested its minority stake in TerraSource Holdings and sold its majority stake in the Milacron injection molding and extrusion business.
Hillenbrand employs nearly 10,500 people worldwide across its two main divisions, Advanced Process Solutions and Molding Technology Solutions. The company operated 23 facilities that span the U.S., Europe and Asia, as of its latest annual report.
Like many manufacturers, Hillenbrand has encountered headwinds related to tariffs. Its customers have exhibited “cautious order behavior” and delayed project decisions due to economic and tariff uncertainty, CEO Kimberly Ryan said on a fiscal Q3 earnings call in August. Revenue in the quarter dropped to $599 million, down 24% from the previous year’s Q3 revenue of $787 million. .
In August, Bloomberg reported Hillenbrand was considering a potential sale.
Hillenbrand’s industrial focus attracted the attention of Lone Star Funds.
“Lone Star is fortunate to have a long track record in related industrial manufacturing, and our expertise will be brought to bear in partnering with Hillenbrand's management team to invest in the business and help foster continued growth and innovation at the company,” CEO Donald Quintin said in a statement.
Lone Star’s private equity division has made 58 investments, with the largest concentration of funds in the industrials sector. Recent acquisitions include Kidde Global Solutions, a manufacturer of detection, alarm and life safety products, and Binks, which produces equipment to control, apply and cure spray paint.
