Hillenbrand Inc. is exploring strategic alternatives for its Batesville burial and cremation product subsidiary as it acquires Linxis Group, a Nantes, France-based provider of mixing, ingredient automation, and portioning solutions for food and other markets, for $583.5 million.
Founded in 1884 and a part of Hillenbrand since 1906, Batesville produces caskets, urns and memorial keepsakes for the death care industry.
Over the decades, Batesville has provided stable and fairly predictable cash flows for Hillenbrand. Sales were up 13 percent in 2021. The subsidiary generated $623 million in sales last year, which was 22 percent of the overall record sales of $2.9 billion.
Hillenbrand's board of directors initiated a process to look at a range of potential alternatives to build on the Batesville legacy, Hillenbrand CEO Kim Ryan said in a July 20 webcast.
"Through this process, we are focusing on determining the best path to benefit our associates, customers and shareholders. We have no specific timetable for this review but will update it again at the conclusion of the evaluation process," Ryan said. "This is an important moment for Hillenbrand and I'm confident we're well positioned to drive long-term growth and deliver meaningful value to our shareholders."
Meanwhile, the pending Linxis deal will bring Hillenbrand complementary equipment and systems for its Coperion business unit, creating cross-selling opportunities by expanding its product offering to the food market, according to another company news release.
Coperion manufactures equipment for compounding, extrusion, feeding, weighing and bulk material handling. Linxis specializes in dosing, kneading, mixing, granulating, drying and coating technologies. The group expects calendar year 2022 Linxis sales of about 300 million euros.
Hillenbrand is buying Linxis from Beris International SARL, an affiliate of IK Partners, and additional sellers for an enterprise value of about 572 million euros ($583.5 million).
The deal is expected to close before the end of year subject to regulatory approvals.
"Linxis Group will continue to build upon our profitable growth strategy by further strengthening and accelerating our position in the attractive food end market and enhancing the technical capabilities of our products and service offerings," Ryan said.
Hillenbrand aims to increase its presence in both the food and recycling markets, she added, pointing to the recent acquisition of recycling equipment specialist Herbold Meckesheim GmbH for 79 million euro ($82.8 million).
When the Linxis transaction is completed, the group's 1,000 employees operating in 10 manufacturing facilities will join the Coperion and Rotex brands as part of Hillenbrand's Advanced Process Solutions segment. The segment provides industrial equipment and systems and aftermarket parts and services for a variety of end markets and applications.
Hillenbrand plans to use debt financing, cash on hand, and cash available under its revolving credit facility to fund this acquisition.
For the Batesville review, Hillenbrand officials said the evaluation may not lead to a transaction, and they don't intend to provide any additional information until the review process is completed or terminated.