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Hillenbrand to acquire Milacron
Posted on Friday, 12 July 2019 13:58
Hillenbrand has reached an agreement to acquire plastics processing equipment maker Milacron Holdings in a cash and stock transaction worth USD 2.00 billion, including USD 686.00 million of debt at 31st March 2019.
Under the terms of the transaction, the industrial products manufacturer is paying USD 11.80 in cash and 0.16 shares, representing a total offer price of USD 18.07 and a premium of 34.0 per cent to the target’s close of USD 13.53 on 11th July 2019, the last trading day prior to the announcement.
Shares in Milacron gained 21.0 per cent to USD 16.37 at 09:04 earlier today, giving the company a market capitalisation of USD 953.89 million.
The deal is part of Hillenbrand’s plan to become a world-class global diversified industrial company by adding new strategic businesses to expand its portfolio.
It believes that with Milacron it will have increased scale and product diversification, enhancing its abilities to serve customers through complementary technologies across the plastics value chain, compounding and recycling, among other markets.
Hillenbrand will finance the cash portion of the consideration through debt financing and has secured a committee bridge facility from JPMorgan.
Closing is subject to regulatory and shareholder approvals and is expected to complete in the first quarter of 2020.
Milcron manufactures, distributes and services engineered and customised systems in the plastics technology and processing industry, which is worth about USD 30.00 billion.
The company generated adjusted earnings before interest, taxes, depreciation and amortisation of USD 41.00 million on sales of USD 248.70 million in the three months ended 31st March 2019.
During the six months to the same date, Hillenbrand posted net income of USD 66.30 million, on revenue of USD 874.90 million.
The news comes two months after Cyprium Investment Partners and Osgood Capital Group acquired Milcron’s uniloy blow molding business for an undisclosed amount.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 346 deals targeting the industrial machinery manufacturing sector announced in 2019 to date.
Hillenbrand’s USD 2.00 billion acquisition of Milcron is the largest, followed closely by Thomas H Lee Partners and other investors buying Autostore in Norway for NOK 16.00 billion (USD 1.87 billion).
JR Automation Technologies, Wuhan Marine Machinery Plant and McCloskey International, among others, have also been targeted so far this year.
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