- Advances Hillenbrand's long-term profitable growth strategy by
increasing scale in food end market, particularly within attractive
pet food sector
- Adds complementary technologies and processing expertise and
expands the product offerings and capabilities within Hillenbrand's
Advanced Process Solutions segment across existing key end markets
including food, durable plastics, and chemicals
- Expected to be accretive to Adjusted EPS within the first full
year and deliver ROIC in excess of cost of capital by year
five
BATESVILLE, Ind., Sept. 1,
2023 /PRNewswire/ -- Hillenbrand, Inc. (NYSE: HI)
announced today that it has completed the acquisition of
the Schenck Process Food and Performance Materials ("FPM")
business, from Schenck Process Group, a portfolio company of
Blackstone, for an enterprise value of approximately $730 million.
"The completion of the FPM acquisition further strengthens our
leadership position across attractive, growing end markets of food,
durable plastics, and chemicals. This acquisition represents
another step forward in the execution of our strategy to grow as a
pure-play industrial company," said Kim
Ryan, President and CEO of Hillenbrand. "By combining the
applications and systems processing expertise of FPM with our
Advanced Process Solutions segment and deploying the Hillenbrand
Operating Model, we are well-positioned to offer greater value to
our customers and drive scale efficiencies. I am confident this
transaction further positions us to deliver profitable growth and
compelling long-term shareholder value."
Headquartered in Kansas City,
Missouri, FPM has over 1,300 employees globally and sells to
customers in over 150 countries, with approximately 85% of revenues
generated in North America. FPM
specializes in the design, manufacturing, and service of feeding,
filtration, baking, and material handling technologies and systems
that are highly complementary to the equipment and solutions
currently offered in Hillenbrand's Advanced Process Solutions (APS)
segment. Hillenbrand expects FPM to generate full calendar year
2023 revenue of approximately $540
million and approximately $68
million of EBITDA.
FPM joins Hillenbrand's APS segment, which is focused on
highly-engineered industrial processing solutions and
aftermarket parts and service for a variety of end markets and
applications, including durable plastics, recycling, and processed
food.
About Hillenbrand
Hillenbrand (NYSE: HI) is a global industrial company that
provides highly-engineered, mission-critical processing equipment
and solutions to customers in over 100 countries around the world.
Our portfolio is composed of leading industrial brands that serve
large, attractive end markets, including durable plastics, food,
and recycling. Guided by our Purpose — Shape What Matters For
Tomorrow™ — we pursue excellence, collaboration, and innovation to
consistently shape solutions that best serve our associates,
customers, communities, and other stakeholders. To learn more,
visit: www.Hillenbrand.com.
Disclosure Regarding Forward-Looking Statements
Throughout this release, we make a number of "forward-looking
statements," including statements regarding the FPM acquisition,
such as statements about the anticipated benefits of the FPM
acquisition, that are within the meaning of Section 27A of the
Securities Act of 1933, as amended, Section 21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, and that are intended to be covered
by the safe harbor provided under these sections. As the words
imply, these are statements about future sales, earnings, cash
flow, results of operations, uses of cash, financings, ability to
meet deleveraging goals, and other measures of financial
performance or potential future plans or events, strategies,
objectives, beliefs, prospects, assumptions, expectations, and
projected costs or savings or transactions of the Company that
might or might not happen in the future, as contrasted with
historical information. Forward-looking statements are based on
assumptions that we believe are reasonable, but by their very
nature are subject to a wide range of risks. If our assumptions
prove inaccurate or unknown risks and uncertainties materialize,
actual results could vary materially from Hillenbrand's
expectations and projections.
Words that could indicate that we are making forward-looking
statements include the following:
intend
|
believe
|
plan
|
expect
|
may
|
goal
|
would
|
project
|
position
|
become
|
pursue
|
estimate
|
will
|
forecast
|
continue
|
could
|
anticipate
|
remain
|
target
|
encourage
|
promise
|
improve
|
progress
|
potential
|
should
|
impact
|
|
This is not an exhaustive list, but is intended to give you an
idea of how we try to identify forward- looking statements. The
absence of any of these words, however, does not mean that the
statement is not forward-looking.
Here is the key point: Forward-looking statements are not
guarantees of future performance or events, and actual results or
events could differ materially from those set forth in any
forward-looking statements. Any number of factors, many of which
are beyond our control, could cause our performance to differ
significantly from what is described in the forward-looking
statements. These factors include, but are not limited to: global
market and economic conditions, including those related to the
financial markets; the impact of contagious diseases, such as the
outbreak of the novel strain of coronavirus ("COVID-19") and the
escalation thereof due to variant strains of the virus and the
societal, governmental, and individual responses thereto, including
supply chain disruptions, loss of contracts and/or customers,
erosion of some customers' credit quality, downgrades of the
Company's credit quality, closure or temporary interruption of the
Company's or its suppliers' manufacturing facilities, travel,
shipping and logistical disruptions, domestic and international
general economic conditions, such as inflation, exchange rates and
interest rates, loss of human capital or personnel, and general
economic calamities; risks related to the Russian Federation's invasion of Ukraine and resulting geopolitical instability
and uncertainty, which could have a negative impact on our ability
to sell to, ship products to, collect payments from, and support
customers in certain regions, in addition to the potential effect
of supply chain disruptions that could adversely affect
profitability; the risk of business disruptions associated with
information technology, cyber-attacks, or catastrophic losses
affecting infrastructure; the possibility of unanticipated costs or
liabilities associated with the negative effects of the FPM
acquisition, the Linxis Group SAS ("Linxis") acquisition, or other
acquisitions on the Company's business, financial condition,
results of operations and financial performance (including the
ability of the Company to maintain relationships with its
customers, suppliers and others with whom it does business); the
possibility that the anticipated benefits from the FPM acquisition,
the Linxis acquisition, and other acquisitions, including potential
synergies and cost savings, cannot be realized by the Company in
full or at all or may take longer to realize than expected, or the
failure of the Company or any acquired company to achieve its plans
and objectives generally; risks that the integrations of FPM,
Linxis, or other acquired businesses disrupt current operations or
pose potential difficulties in employee retention or otherwise
adversely affect financial or operating results; increasing
competition for highly skilled and talented workers as well as
labor shortages; our level of international sales and operations;
the impact of incurring significant amounts of indebtedness and any
inability of the Company to respond to changes in its business or
make future desirable acquisitions; the ability of the Company to
comply with financial or other covenants in debt agreements;
cyclical demand for industrial capital goods; impairment charges to
goodwill and other identifiable intangible assets; competition in
the industries in which we operate, including on price; impacts of
decreases in demand or changes in technological advances, laws, or
regulation on the revenues that we derive from the plastics
industry; our reliance upon employees, agents, and business
partners to comply with laws in many countries and jurisdictions;
increased costs, poor quality, or unavailability of raw materials
or certain outsourced services and supply chain disruptions; the
dependence of our business units on relationships with several
large customers and providers; the impact to the Company's
effective tax rate of changes in the mix of earnings or tax laws
and certain other tax-related matters; exposure to tax
uncertainties and audits; involvement in claims, lawsuits and
governmental proceedings related to operations; uncertainty in
the United States political and
regulatory environment or global trade policy; adverse foreign
currency fluctuations; labor disruptions; and the effect of certain
provisions of the Company's governing documents and Indiana law that could decrease the trading
price of the Company's common stock. Shareholders, potential
investors, and other readers are urged to consider these risks and
uncertainties in evaluating forward-looking statements and are
cautioned not to place undue reliance on the forward-looking
statements. For a more in-depth discussion of certain factors that
could cause actual results to differ from those contained in
forward-looking statements, see the discussions under the heading
"Risk Factors" in Part I, Item 1A of Hillenbrand's Form 10-K for
the year ended September 30, 2022,
filed with the Securities and Exchange Commission ("SEC") on
November 16, 2022, and in Part II,
Item 1A of Hillenbrand's Form 10-Q for the quarter ended
June 30, 2023, filed with the SEC on
August 2, 2023. The forward-looking
information in this release speaks only as of the date hereof, and
we assume no obligation to update or revise any forward-looking
information.
Note Regarding Certain Financial Information
FPM's expected calendar year 2023 revenue and EBITDA are based
on unaudited prospective financial information prepared and
provided to Hillenbrand by FPM. FPM's actual results could differ
materially from these projections. In addition, FPM's financial
statements are prepared in accordance with International Financial
Reporting Standards ("IFRS"), which differs in certain material
respects from US generally accepted accounting principles ("US
GAAP"). For instance, when compared to US GAAP, IFRS (i) allows for
the capitalization and amortization of certain research and
development costs rather than immediate expense recognition, and
(ii) treats all leases as financing leases rather than operating or
financing, each of which may impact EBITDA as presented thereunder.
FPM defines EBITDA as net income before interest, income tax,
depreciation, and amortization (in each case determined in
accordance with IFRS). Thus, as permitted by Regulation G,
Hillenbrand does not provide quantitative reconciliations of such
forward-looking non-GAAP financial information to the comparable
GAAP measure, because the impact and timing of these potential
charges or gains is inherently uncertain and difficult to predict
and is unavailable without unreasonable efforts. Such items could
have a substantial impact on GAAP measures of Hillenbrand's
financial performance. In addition, the Company believes such
reconciliations would imply a degree of precision and certainty
that could be confusing to investors.
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