DEFA14A: Hillenbrand Merger Faces Shareholder Lawsuits, Disclosures Issued

Hillenbrand, Inc. issued supplemental disclosures in response to shareholder lawsuits alleging deficiencies in its definitive proxy statement regarding the proposed merger with Lone Star affiliates.

Summary

• Hillenbrand, Inc. entered into a Merger Agreement with LSF12 Helix Parent, LLC and LSF12 Helix Merger Sub, Inc. (affiliates of Lone Star Fund XII, L.P.) on October 14, 2025.
• The merger involves Merger Sub merging into Hillenbrand, with Hillenbrand surviving as a wholly-owned subsidiary of Parent.
• Two complaints were filed in New York State court by purported shareholders (Grant v. Hillenbrand, Inc., et al., and Kent v. Hillenbrand, Inc., et al.) on December 11 and 12, 2025, respectively.
• The complaints allege the Definitive Proxy Statement (filed December 1, 2025) contains false and misleading information and/or fails to disclose material information, seeking to enjoin the merger or alternative damages and attorney fees.
• Hillenbrand also received similar demands from other purported shareholders.
• Hillenbrand believes these claims are without merit and no additional disclosures are required under applicable law.
• To moot the claims, avoid merger delays, and minimize litigation costs, Hillenbrand voluntarily made supplemental disclosures in this Form 8-K without admitting liability or wrongdoing.
• The supplemental disclosures amend sections of the Definitive Proxy Statement related to the Background of the Merger, Opinion of Hillenbrand's Financial Advisor (Evercore's analyses), and Certain Financial Projections.
• Initial non-binding acquisition proposals received between August 13-14, 2025, included Lone Star at $34/share, Bidder A at $28-$32/share, Bidder B at $32.50/share, Bidder C at $23-$26/share, and an oral indication of $25/share.
• On September 29, 2025, Lone Star submitted a formal non-binding proposal to acquire Hillenbrand at $31 per share, a decrease attributed to additional information received during due diligence, and included a provision prohibiting dividends during the interim period.
• Evercore's Discounted Cash Flow Analysis indicated an implied equity value per share range of $28.55 to $53.20, compared to the Merger Consideration of $32.00.
• Evercore's Selected Public Company Trading Analysis indicated an implied equity value per share range of $25.85 to $42.15, compared to the Merger Consideration of $32.00.
• Evercore's Selected Transactions Analysis indicated an implied equity value per share range of $29.10 to $39.00, compared to the Merger Consideration of $32.00.
• Evercore's Illustrative Present Value of Future Share Price analysis indicated an implied equity value per share range of $33.35 to $46.95, compared to the Merger Consideration of $32.00.
• Financial projections for fiscal years 2026-2030 show Net Revenue growing from $2,425 million to $3,262 million, Adjusted EBITDA from $391 million to $689 million, and Unlevered Free Cash Flow from $230 million to $443 million.

Sentiment

Score: 4

Explanation: The filing addresses legal challenges to a proposed merger, indicating uncertainty and potential complications, despite management's denial of merit. While the company is taking steps to mitigate risks, the existence of lawsuits and the need for supplemental disclosures introduce a negative sentiment. Some valuation analyses show the merger consideration is within or below the lower end of implied value ranges, which could be a point of contention for shareholders.

Positives

• Hillenbrand management believes the shareholder claims are without merit and that no additional disclosures were legally required.
• The company is taking proactive steps to avoid delays and minimize litigation costs by making voluntary supplemental disclosures.
• Evercore's financial analyses, particularly the Discounted Cash Flow Analysis and Illustrative Present Value of Future Share Price, show potential implied equity values per share significantly above the $32.00 merger consideration.

Negatives

• Two shareholder lawsuits have been filed alleging false and misleading information and/or failure to disclose material information in the Definitive Proxy Statement.
• Additional demands from purported shareholders alleging similar deficiencies have been received.
• The lawsuits seek to enjoin the merger or demand rescissory damages and attorney fees, introducing legal uncertainty.
• Lone Star's formal proposal price decreased from an initial $34 per share to $31 per share after due diligence.
• Lone Star's proposal included a provision prohibiting Hillenbrand from paying any dividends during the interim period between signing and closing.

Risks

• The Merger may not be consummated in a timely manner or at all.
• Possible inability to obtain required regulatory approvals for the Merger and to satisfy other closing conditions, including shareholder approval.
• Potential occurrence of any event, change, or circumstance that could give rise to the termination of the Merger Agreement.
• Risk that the Merger Agreement may be terminated in circumstances requiring Hillenbrand to pay a termination fee.
• Risk that relevant affiliates of Lone Star fail to obtain on a timely basis or at all the financing necessary to complete the Merger.
• Potential litigation relating to the Merger and the outcome of any such litigation.
• Potential adverse impact on Hillenbrand of contractual restrictions under the Merger Agreement that limit its ability to pursue business opportunities or strategic transactions.
• Risks relating to significant transaction costs associated with the Merger and the possibility that the Merger may be more expensive to complete than anticipated.
• Competitors' responses to the Merger.
• Global market and economic conditions, including volatility in financial markets and changing trade policies.
• Risk of business disruptions associated with information technology, cyber-attacks, or catastrophic losses affecting infrastructure.
• Increasing competition for highly skilled and talented workers, as well as labor shortages.
• Closures or slowdowns and changes in labor costs and labor difficulties.
• Uncertainty related to environmental regulation and industry standards, as well as physical risks of climate change.
• Increased costs, poor quality, or unavailability of raw materials or certain outsourced services and supply chain disruptions.
• Economic and financial conditions including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets.
• Uncertainty in U.S. global trade policy and risks with governmental instability in certain parts of the world.
• Hillenbrand's level of international sales and operations.
• Negative effects of acquisitions, including the Schenck Process Food and Performance Materials business and Linxis Group SAS acquisitions, on Hillenbrand's business, financial condition, results of operations and financial performance.
• Competition in the industries in which Hillenbrand operates, including on price.
• Cyclical demand for industrial capital goods.
• The ability to recognize the benefits of any acquisition or divestiture, including potential synergies and cost savings or the failure to achieve plans and objectives generally.
• Potential adverse effects of the announcement or results of the Disposition or the announcement or pendency of the Merger, or any failure to complete the Merger, on the market price of Hillenbrand common stock or on relationships with personnel, customers, suppliers, and others.
• Risks related to diversion of management's attention from ongoing business operations due to the Disposition or the Merger.
• Impairment charges to goodwill and other identifiable intangible assets.
• Impacts of decreases in demand or changes in technological advances, laws, or regulation on net revenues derived from the plastics industry.
• The impact to Hillenbrand's effective tax rate of changes in the mix of earnings or in tax laws and certain other tax-related matters.
• Exposure to tax uncertainties and audits.
• Involvement in claims, lawsuits, and governmental proceedings related to operations.
• Uncertainty in the U.S. political and regulatory environment.
• Adverse foreign currency fluctuations.
• Labor disruptions.

Future Outlook

Hillenbrand's financial projections forecast steady growth in net revenue, adjusted EBITDA, and unlevered free cash flow through fiscal year 2030, with adjusted EBITDA margin expected to expand from 16.1% in 2026 to 21.1% in 2030. The company's financial advisor, Evercore, provided various valuation analyses, which indicate a range of implied equity values per share, some of which are above the $32.00 merger consideration, suggesting potential for future value creation under the proposed merger terms or as a standalone entity.

Management Comments

• Hillenbrand believes that the claims asserted in the Actions are without merit and that no additional disclosures were or are required under applicable law.
• To moot the unmeritorious disclosure claims, to avoid the risk of the actions described above delaying or adversely affecting the Merger and to minimize the costs, risks and uncertainties inherent in litigation, without admitting any liability or wrongdoing, Hillenbrand has determined to make voluntarily the supplemental disclosures in this Current Report on Form 8-K.
• Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the supplemental disclosures herein. To the contrary, Hillenbrand specifically denies all allegations in the Actions that any additional disclosure was or is required.

Industry Context

The proposed merger of Hillenbrand with affiliates of Lone Star Fund XII, L.P. reflects ongoing consolidation and private equity interest within the industrial capital goods and process equipment sectors. The valuation analyses, which compare Hillenbrand to selected public process equipment companies (e.g., Alfa Laval AB, Dover Corporation) and industrial companies with similar financial characteristics (e.g., Helios Technologies, Inc., The Timken Company), as well as recent M&A transactions (e.g., Apollo/Barnes Group, JBT/Marel), provide a benchmark for market multiples and transaction values in these industries. Hillenbrand's own history of strategic acquisitions and divestitures, such as the acquisition of Schenck Process Food and Performance Materials and the sale of the Milacron injection molding and extrusion business, indicates a dynamic strategic landscape for the company within its industry.

Comparison to Industry Standards

• Evercore's Selected Public Process Equipment Companies (Alfa Laval AB, Dover Corporation, GEA Group Aktiengesellschaft, JBT Corporation, Kadant Inc., Krones Aktiengesellschaft, The Middleby Corporation) exhibited a TEV / NTM Adjusted EBITDA range of 6.6x to 15.0x, with a median of 12.2x.
• Evercore's Selected Public Financial Characteristics Companies (Helios Technologies, Inc., Kennametal Inc., Sulzer Ltd., The Timken Company, Valmet Oyj) showed a TEV / NTM Adjusted EBITDA range of 7.2x to 11.7x, with a median of 8.2x.
• Hillenbrand's implied equity values per share from the Selected Public Company Trading Analysis ($25.85 to $42.15) compare to the Merger Consideration of $32.00, indicating the offer is within the broader industry valuation range but potentially below the higher end of comparable public companies.
• Selected Transactions in the industrial capital goods industry (e.g., Apollo Global Management/Barnes Group Inc. at 11.9x, JBT Corporation/Marel hf. at 15.2x, KKR & Co. Inc./CIRCOR International, Inc. at 13.2x, Hillenbrand/Schenck Process Food and Performance Materials at 10.7x, Lone Star Fund XI/SPX FLOW, Inc. at 16.9x) showed LTM Adjusted EBITDA multiples ranging from 5.7x to 16.9x, with a mean of 10.9x and median of 10.6x.
• Hillenbrand's implied equity values per share from the Selected Transactions Analysis ($29.10 to $39.00) compared to the Merger Consideration of $32.00, suggesting the offer is within the range of recent transaction multiples for similar industrial capital goods companies.

Legal Proceedings

• Grant v. Hillenbrand, Inc., et al., No. 656449/2025, filed on December 11, 2025, in New York State court by a purported shareholder.
• Kent v. Hillenbrand, Inc., et al., No. 656455/2025, filed on December 12, 2025, in New York State court by a purported shareholder.
• Both complaints allege the Definitive Proxy Statement includes false and misleading information and/or fails to disclose material information in violation of New York state law.
• The complaints seek to enjoin Hillenbrand from consummating the Merger or, alternatively, rescissory damages and attorney fees.
• Hillenbrand has also received demands from purported shareholders alleging similar deficiencies and seeking supplemental disclosures.

Stakeholder Impact

• Shareholders are directly impacted by the merger consideration, the alleged deficiencies in the proxy statement, and the outcome of the lawsuits, which could affect the merger's completion or terms.
• Management and employees face potential diversion of attention due to the merger and litigation, with future employment under new ownership (Lone Star's contemplated incentive equity plan) being a factor.
• Customers and suppliers may experience potential adverse effects on their relationships with Hillenbrand due to the merger's announcement or pendency.
• Creditors are impacted by the debt financing related to the acquisition, which will alter Hillenbrand's capital structure.

Next Steps

• Hillenbrand shareholders will need to approve the Merger Agreement.
• The parties to the Merger Agreement will seek required regulatory approvals and satisfy other closing conditions.
• Hillenbrand may face additional similar allegations or amended complaints, though it does not intend to announce each one.

Key Dates

Recommendation

The filing details ongoing shareholder litigation challenging the proposed merger, which introduces uncertainty regarding its timely completion and terms. While management asserts the claims are without merit and has issued supplemental disclosures to mitigate risks, the existence of these legal proceedings and the potential for delays or changes to the merger agreement warrant a cautious 'hold' stance. The financial advisor's analyses show a range of implied values, with the $32.00 merger consideration falling within or below some of these ranges, suggesting potential for shareholder dissatisfaction. Investors should await further clarity on the legal outcomes and the merger's progression before making definitive buy or sell decisions.

Keywords

Hillenbrand, Merger, SEC Filing, Proxy Statement, Shareholder Lawsuit, Litigation, Supplemental Disclosure, Lone Star, Acquisition, Financial Projections, Discounted Cash Flow, EBITDA, Industrial Capital Goods, Process Equipment, Corporate Governance, Risk Factors