Auxiliary equipment maker K-Tron International Inc. will have a new owner — Hillenbrand Inc., which also owns Batesville Casket Co.
Hillenbrand announced Jan. 11 it will acquire the materials-handling equipment maker for about $435 million, or $150 per share. The offer is a 32 percent premium over K-Tron's closing price Jan. 8, according to Hillenbrand.
K-Tron's headquarters will remain in Pitman.
K-Tron is traded on Nasdaq. Hillenbrand, based in Batesville, Ind., began trading on the New York Stock Exchange in 2008, after it spun off its Hill-Rom medical products unit into a separate company, leaving Hillenbrand with only the casket business.
For the plastics industry, K-Tron makes material conveyors, bulk handling equipment, feeders and blenders. The machinery firm serves a number of other markets, including food, pharmaceuticals and power generation.
What do caskets and blenders have in common? Not much, Hillenbrand officials acknowledge.
“Although K-Tron's products differ from ours, we are both manufacturing companies that share similar processes and core operational values,” said Kenneth Camp, Hillenbrand's president and CEO. He said Batesville Casket and K-Tron both are leaders in their sectors, with highly effective executive management teams.
Hillenbrand is keeping much of K-Tron's management in place. Kevin Bowen will be president of K-Tron's process group. Donald Melchiorre will be president of K-Tron's size-reduction group. Both men will report to Camp.
Edward Cloues, K-Tron's chairman and CEO, will be appointed to the Hillenbrand board of directors once the sale is completed.
Hillenbrand expects to use cash on hand and debt financing to fund the acquisition.
K-Tron generated $243 million in sales and net profit of $25.8 million for the fiscal year ended Jan. 3, 2008. Final-year 2009 numbers have not been released, but K-Tron reported $139.7 million in sales for the first nine months through Oct. 3.
P&M Corporate Finance LLC of Southfield, Mich., advised Hillenbrand on the deal.
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