Hillenbrand Inc. has completed its $1.9 billion acquisition of Milacron Holdings Corp.
Milacron shareholders had already approved the deal on Nov. 20, and Hillenbrand followed up that news a day later with a news release that it has wrapped up its cash and stock transaction.
"This is an important milestone in both companies' long histories and I'm excited to welcome Milacron employees to Hillenbrand," Joe Raver, Hillenbrand president and CEO said in the release.
Hillenbrand, like Milacron, is traded on the New York Stock Exchange. With the deal completed, Milacron becomes a wholly owned subsidiary of Hillenbrand, and Milacron stock will no longer trade on the NYSE.
Hillenbrand noted it is reviewing strategic alternatives for the Cimcool business and has hired advisor Houlihan Lokey to assist in the review.
Hillenbrand has appointed Mac Jones as president of Milacron Injection Molding & Extrusion and Ling An-Heid as president of Mold-Masters. They will join Hillenbrand's executive team. The news release does not mention the role of Tom Goeke, Milacron’s CEO since 2012, going forward.
Each Milacron stockholder was allowed one vote for each share of common stock held. According to an Oct. 18 proxy statement filed with the U.S. Securities and Exchange Commission, there were more than 70 million shares of Milacron common stock entitled to vote on the merger.
Voting results from the special meeting were filed with the SEC a few hours after the vote. More than 52 million shares voted to approve the merger, with 19,598 voting against it and 1,073 declining to vote.
In addition to the merger, Milacron stockholders also voted to approve the merger-related compensation proposal, payable to its executive officers.
A Milacron spokeswoman said the company has no additional comment at this time.
Hillenbrand of Batesville, Ind., announced July 12 it was buying Milacron in a cash and stock deal valued at about $2 billion. Under terms of the agreement, as previously reported in July, Milacron stockholders will receive $11.80 in cash and Hillenbrand common stock under a fixed exchange rate of 0.1612 for each share of Milacron stock that they own.
Hillenbrand is the parent company of compounding extruder maker Coperion and auxiliary equipment firms K-Tron and Rotex. It also manufactures burial caskets under the 100-year-old Batesville casket brand. The company has been diversifying into industrial machinery, bulking up its Process Equipment Group.
Hillenbrand stockholders now own about 84 percent of the combined company. Milacron stockholders own about 16 percent.
Hillenbrand's acquisition of Milacron will result in "a significant amount of debt," the company said in a Nov. 13 SEC filing.
As of Sept. 30 — the end of fiscal 2019 for the company — Hillenbrand's outstanding debt was $619.5 million. Following its acquisition of Milacron, the company expects that number to climb up to approximately $2 billion, the filing states.
As part of the merger, Hillenbrand repayed Milacron's existing term loan facility totaling $833 million as of June 30, according to the proxy statement.
Within three years after the closing, Hillenbrand expects $50 million in cost savings from reducing public-company operating costs and improving operational efficiencies, as well as synergies among machinery businesses and better buying power for material and components.
Hillenbrand reported its year-end results Nov. 14, posting a sales increase of 2 percent for the year at $1.81 billion primarily driven by the Process Equipment Group.
Raver said Milacron will also extend Hillenbrand's reach into durable plastics processing.
Milacron's 2019 fiscal year ends Dec. 31. The company posted third-quarter results Nov. 12. It did not host a conference call with analysts because of the pending Hillenbrand deal.
Sales and orders for the quarter showed double-digit declines compared with the third quarter of 2018. The company said industrywide headwinds — ranging from a global slowdown to ongoing trade tensions — impacted results for the quarter, according to a news release announcing the financial results.
"Milacron's third-quarter earnings do not change our belief that it is a highly strategic, long-term transformational acquisition, and we remain confident in achieving $50 million in targeted cost synergies and creating long-term shareholder value," Raver said.
Milacron, based in Blue Ash, Ohio a suburb of Cincinnati, brings Hillenbrand three business segments. This includes Advanced Plastic Processing Technologies, which makes injection molding machines, extruders and structural foam machines; Melt Deliver and Control Systems, which makes hot runner and process control systems, mold bases and components under the Mold-Masters, DME and Tirad brands; and Fluid Technologies, its Cimcool product line of fluids for metalworking.
