BATESVILLE, Ind. — Hillenbrand Inc. announced Wednesday that it has entered into a definitive agreement to acquire the Schenck Process Food and Performance Materials business, a portfolio company of Blackstone, for an enterprise value of approximately $730 million.
The transaction is expected to close during Hillenbrand's fiscal fourth quarter of 2023, subject to regulatory approvals and other customary closing conditions.
Headquartered in Kansas City, Missouri, FPM has over 1,300 global employees 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 segment. FPM is expected to generate calendar year 2023 revenue of approximately $540 million and approximately $68 million of EBITDA. Upon closing, FPM will become part of the Advanced Process Solutions segment.
"With this acquisition, we further strengthen our leadership across the attractive, growing end markets of food, durable plastics and chemicals, through strong brands that enhance the breadth of our technology and service capabilities," said Kim Ryan, president and CEO of Hillenbrand. "By combining the applications and systems processing expertise of our Advanced Process Solutions segment with FPM, we will be positioned to offer greater value to our customers and drive scale benefits across manufacturing, engineering, and procurement.
"Over the last 12 months, we've divested our legacy death care segment, and acquired high-quality industrial businesses that serve large, attractive end markets that are underpinned by long-term, secular growth trends. These actions have significantly transformed Hillenbrand into a global leader in highly-engineered, mission-critical industrial processing solutions. I am confident this transaction further positions us to deliver compelling long-term shareholder value."
Hillenbrand expects to use cash on hand and cash available under its revolving credit facility to fund this acquisition. Following the close of the transaction, Hillenbrand's projected net debt to adjusted EBITDA ratio is expected to be approximately 3.2x, with a plan to return to its communicated target net leverage range of 1.7x to 2.7x within 15 months after closing.