Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
News
July 12, 2019 03:12 PM

Hillenbrand purchase ‘a unique opportunity for Milacron'

Bill Bregar and Audrey LaForest
Plastics News Staff
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Milacron cincinnati
    Joe Wilssens

    Milacron displayed the Cincinnati 2250 Injection machine, staking the claim to the biggest at NPE2018. Hillenbrand Inc., the owner of Coperion, announced July 12 it is buying Milacron Holdings Corp.

    In a blockbuster deal in the plastics machinery sector, Hillenbrand Inc. — the Batesville, Ind.-based parent company of compounding extruder maker Coperion and auxiliary equipment firms K-Tron and Rotex — is buying Milacron Holdings Corp. in a cash and stock deal valued at about $2 billion.

    Executives of both companies said one key area will be in extruders, making a combined, stronger and more diversified company.

    Both companies also generate about one-third of their machinery-related sales from aftermarket spare parts and service — so-called "consumables," or business that brings in steadier sales than capital machinery.

    Milacron CEO Tom Goeke said that only about 35 percent of the total Milacron portfolio is sensitive to cycles thanks to the Mold-Masters hot runner, DME mold-component and metal-cutting fluids businesses.

    The boards of directors of both companies unanimously approved the sale, announced July 12, which is expected to close in the first quarter of 2020. The deal is subject to approval by Milacron shareholders.

    The combined company is expected to generate annual sales of nearly $3 billion and free cash flow of more than $325 million by 2021. Milacron had sales of $1.1 billion in 2018. It employs approximately 5,800 people. Hillenbrand is a $1.8 billion company with a global workforce of roughly 6,500. Both companies are traded on the New York Stock Exchange.

    The combined operation will have $502 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).

    Joe Wilssens
    Goeke

    Hillenbrand, the manufacturer of burial caskets under the 100-year-old Batesville Casket brand, went public in 2008 and has been diversifying into industrial machinery, building a Process Equipment Group.

    The acquisition of Milacron — the largest U.S. manufacturer of plastics machinery — is global diversification on steroids. Hillenbrand President and CEO Joe Raver said the deal gives the company more global reach in all areas of the plastics machinery sector.

    "I firmly believe that this is the next step in Hillenbrand's vision to become a world-class global diversified industrial company," Raver said in a conference call after the announcement. "In the Milacron businesses, we're getting, you know, really great technology, sizable customer install base. And these are good businesses with good growth profiles and operating margins."

    Raver added: "Milacron advances our strategy to drive long-term profitable growth and value to our shareholders."

    Milacron brings Hillenbrand three business segments: Advanced Plastics Processing Technologies, which makes injection molding machines, extruders and structural foam machines; Melt Delivery and Control Systems, which makes hot runner and process control systems, mold bases and components under the Mold-Master, DME and Tirad brands; and Fluid Technologies, the Cimcool product line of fluids for metalworking.

    When the deal closes, Hillenbrand shareholders will own about 84 percent of the combined company and Milacron shareholders will own about 16 percent.

    Under terms of the agreement, 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. Based on Hillenbrand's closing stock price on July 11, the final trading day before the announcement, the cash and stock amount for Milacron shareholders is $18.07 per share, representing a premium of about 38 percent to Milacron's 30-day, volume-weighted average price.

    Milacron's stock soared 21 percent during July 12 premarket trading after news of the buyout was released. Shares were trading 24.5 percent higher to $16.84 in Friday's afternoon trading. Hillenbrand stock tumbled 15 percent before the market opened. Shares were trading down 11.09 percent to $34.56 in afternoon trading. The stock has a 52-week high of $53.41 and a 52-week low of $33.75.

    The $2 billion purchase price includes $686 million in Milacron debt. Hillenbrand Chief Financial Officer Kristina Cerniglia said Hillenbrand is funding the cash portion of the transaction with debt in a bridge financing facility. The company will refinance Milacron's debt, she told financial analysts in the conference call.

    After the deal closes, Hillenbrand will focus on deleveraging its debt and later will again look at strategic acquisitions, Cerniglia said. Within three years after the closing, Hillenbrand expects cost savings of $50 million from reducing public company costs, operating efficiencies and better procurement economics.

    Hillenbrand Inc.
    Raver
    ‘A very good offer'

    The news also comes about a week after Milacron said it had completed the sale of its Uniloy blow molding machinery business to two private equity firms — Osgood Capital Group LLC and Cyprium Investment Partners LLC — for nearly $52 million.

    Goeke said Milacron's board carefully reviewed the offer to sell the company.

    "This transaction represents a unique opportunity for Milacron," he said. "[Milacron leaders and board members] tested the waters and found out that it is, in fact, a very good offer."

    Raver and Goeke gave analysts some details about how the deal came together. It's only about 50 miles between Batesville, Ind., and Milacron's headquarters in the Cincinnati suburb of Blue Ash. Raver said the two met and when they started talking about their respective businesses, "we discovered a lot of similarities." One is in corporate culture, they said — the self-styled Hillenbrand Operating Model is similar to Milacron's business philosophy.

    Raver and Goeke said the two companies have very little overlap, including in the one product that they both make: extruders.

    Hillenbrand bought German compounding extruder maker Coperion in 2012. Coperion makes large, highly engineered extrusion lines for large projects at compounders and resin makers.

    Milacron extruders produce construction products such as PVC pipe, vinyl siding and decking.

    "So [the deal] really expands a large, complementary position in extrusion," Goeke said.

    Raver said the companies can cross-sell extruders and material handling equipment in the short to medium term.

    The deal also extends the combined company's reach into end markets such as construction, consumer packaging automotive, electronics, medical and recycling, he said.

    Amy Steinhauser
    Machinery reaction

    Ownership changes — even big deals involving manufacturing behemoths like Milacron — are part of the plastics machinery industry.

    "It happens and some for the good, some for the bad," said Bill Duff, general manager of sales and marketing at Chinese machinery maker Yizumi-HPM Corp. in Iberia, Ohio. Parent company Guangdong Yizumi Precision Machinery Co. Ltd. bought the intellectual property of HPM — one of the earliest U.S. manufacturers of injection molding presses — in 2011.

    "We're doing quite well, but we couldn't have done well without the investment from Yizumi," Duff said.

    He added: "Will [Hillenbrand] invest in more capability with the company, or will they just take cash out of it? Time will tell."

    Glenn Frohring, president of Absolute Haitian Corp. in Worcester, Mass., said he wasn't surprised by the announcement, especially if Milacron was getting pressure from investors to sell.

    "I don't expect business to change for Milacron," he said. "Hopefully it's a positive thing. We only wish the best for even the competitors in our industry."

    Bill Wood, Plastics News economics editor and founder of Mountaintop Economics & Research Inc., said the acquisition is "a pretty big deal."

    "I don't know of anybody bigger in the U.S. as a far as a machinery company for the plastics industry," he said of Milacron. Given Milacron's size and segment diversity in the U.S. plastics equipment market, Wood said he does not expect to see many deals like this in the future.

    "This deal has clearly been in the works for a long time, but I don't really think these kinds of deals are going to be increasing," he said. "This might actually be the last one."

    RECOMMENDED FOR YOU
    PepsiCo on a ‘multiyear journey' toward bioplastics
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Industry sees Biden bioplastics goal as serious signal
    2
    Biden sets US goal to replace 90% of plastics with biomaterials
    3
    Material Insights: Challenges for Biden bioplastics goal
    4
    Official says Norfolk Southern fire likely started in rail car containing resin
    5
    Trinseo: Equipment failure blamed for latex emulsion leak
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified