Hillenbrand to acquire Milacron in cash, stock deal valued around $2B
Hillenbrand (HI) and Milacron (MCRN) announced that they have entered into a definitive agreement under which Hillenbrand will acquire Milacron in a cash and stock transaction valued at approximately $2B, including net debt of approximately $686M as of March 31.
Under the terms of the agreement, which has been unanimously approved by the boards of both companies, Milacron stockholders will receive $11.80 in cash and a fixed exchange ratio of 0.1612 shares of Hillenbrand common stock for each share of Milacron common stock they own.
Based on Hillenbrand’s closing stock price on July 11, the last trading day prior to the announcement, the implied cash and stock consideration to be received by Milacron stockholders is $18.07 per share, representing a premium of approximately 34% to Milacron’s closing stock price on July 11, and a premium of approximately 38% to Milacron’s 30-day volume-weighted average price as of the close on July 11.
Upon closing, Hillenbrand shareholders will own approximately 84% of the combined company, and Milacron stockholders will own approximately 16%.
Milacron will benefit from the Hillenbrand Operating Model, or HOM, and Hillenbrand expects to leverage Milacron’s global shared services center to drive operational efficiency.
The transaction is expected to generate annualized, run-rate cost synergies of approximately $50M within three years following close, primarily through reducing public company costs, realizing operating efficiencies, and capturing direct and indirect spend opportunities.
The transaction is also expected to generate revenue synergies, driven by opportunities to cross-sell extruder and material handling equipment, and to leverage the combined service footprint to further penetrate the product aftermarket.
These efficiencies will be driven across the combined organization through utilizing the HOM, while maintaining a commitment to serving customers with excellence and innovation.
The transaction, which is expected to close in Q1 of 2020, is subject to customary closing conditions and regulatory approvals, including the approval of stockholders of Milacron.
About the Companies
Hillenbrand, Inc. operates as a diversified industrial company in the United States and internationally. The company operates in two segments, Process Equipment Group and Batesville. The Process Equipment Group segment designs, engineers, manufactures, markets, and services process and material handling equipment and systems for various industries, including plastics, food and pharmaceuticals, chemicals, fertilizers, minerals and mining, energy, wastewater treatment, forest products, and other general industrials.
Milacron Holdings Corp. manufactures, distributes, and services engineered and customized systems within the plastic technology and processing industry in the United States and internationally.
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