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).