DEFA14A: Hillenbrand to Go Private in $3.8B Lone Star Acquisition

Hillenbrand, Inc. announced a definitive agreement to be acquired by an affiliate of Lone Star Funds for $32.00 per share, valuing the company at approximately $3.8 billion.

Summary

• Hillenbrand, Inc. has entered into a definitive agreement to be acquired by an affiliate of Lone Star Funds in an all-cash transaction.
• The acquisition price is $32.00 per share, equating to an enterprise value of approximately $3.8 billion.
• This purchase price represents a premium of approximately 37% over Hillenbrand's unaffected closing share price on August 12, 2025.
• The price also represents a premium of 53% over the volume weighted average price (VWAP) for the 90 days ending August 12, 2025.
• The transaction is unanimously approved by Hillenbrand's Board of Directors.
• The acquisition is expected to close by the end of the first quarter of calendar year 2026, subject to shareholder and regulatory approvals.
• Upon completion, Hillenbrand will become a privately held company, and its shares will no longer trade on the New York Stock Exchange.
• Hillenbrand will issue a press release for its Q4 and fiscal year 2025 earnings on November 19, 2025, but will not hold a conference call or webcast, nor will it issue financial guidance for fiscal year 2026.

Sentiment

Score: 9

Explanation: The sentiment is highly positive for existing shareholders due to the substantial cash premium offered, representing a significant return over recent trading prices. While the company will go private, this is a favorable exit for public investors.

Positives

• Shareholders will receive immediate and certain cash value at $32.00 per share.
• The acquisition price represents a substantial premium of approximately 37% over the unaffected closing share price on August 12, 2025.
• The premium is 53% over the 90-day volume weighted average price (VWAP) ending August 12, 2025.
• The transaction positions Hillenbrand to continue meeting customer needs for highly-engineered processing equipment and solutions.
• Lone Star recognizes Hillenbrand's progress in transforming into a pure-play industrial company and plans to invest in the business for continued growth and innovation.

Negatives

• Hillenbrand will become a privately held company, and its common stock will be delisted from the New York Stock Exchange, removing public trading opportunities.
• No conference call or webcast will be held for the Q4 and fiscal year 2025 earnings announcement on November 19, 2025.
• Hillenbrand will not issue financial guidance for fiscal year 2026.

Risks

• The merger may not be consummated in a timely manner or at all.
• Inability to obtain required regulatory approvals for the merger and satisfy other closing conditions, including shareholder approval.
• Possible occurrence of any event, change, or circumstance that could lead to the termination of the merger agreement.
• Hillenbrand may be required to pay a termination fee under certain circumstances.
• Lone Star Funds' affiliates may fail to obtain the necessary financing to complete the merger on a timely basis or at all.
• Potential litigation relating to the merger and the outcome of any such litigation.
• Potential adverse impact of contractual restrictions under the merger agreement limiting Hillenbrand's ability to pursue business opportunities or strategic transactions.
• Significant transaction costs associated with the merger, potentially exceeding anticipations.
• Competitors' responses to the merger.
• Global market and economic conditions, including financial market volatility, tariffs, and trade policies.
• Business disruptions from information technology issues, cyber-attacks, or catastrophic losses affecting infrastructure.
• Increasing competition for skilled workers, labor shortages, closures, slowdowns, and changes in labor costs.
• Uncertainty related to environmental regulation, industry standards, and physical risks of climate change.
• Increased costs, poor quality, or unavailability of raw materials or outsourced services, and supply chain disruptions.
• Economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices.
• Uncertainty in U.S. global trade policy and governmental instability in certain parts of the world.
• Risks associated with Hillenbrand's international sales and operations.
• Negative effects of past acquisitions (Schenck Process Food and Performance Materials, Linxis Group SAS) on business and financial performance.
• Competition in the industries Hillenbrand operates in, including on price.
• Cyclical demand for industrial capital goods.
• Inability to recognize benefits of acquisitions or divestitures, including the sale of the Milacron injection molding and extrusion business.
• Potential adverse effects of the announcement or pendency of the merger on Hillenbrand's stock price, personnel, customer, and supplier relationships.
• Diversion of management's attention from ongoing business operations due to the merger.
• Impacts of decreases in demand or changes in technological advances, laws, or regulation on revenues from the plastics industry.
• Impact to Hillenbrand's effective tax rate from changes in earnings mix or tax laws, and 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 and labor disruptions.

Future Outlook

Hillenbrand will transition to a privately held company and its shares will no longer trade on the New York Stock Exchange. The company will not issue financial guidance for fiscal year 2026. Lone Star Funds intends to partner with Hillenbrand's management to invest in the business and foster continued growth and innovation within its durable plastics, food, and recycling end markets.

Management Comments

• Helen Cornell, Chairperson of the Board of Directors, stated that the agreement delivers immediate and certain cash value to shareholders at a substantial premium and positions Hillenbrand to continue meeting customer needs.
• Kim Ryan, President and CEO of Hillenbrand, noted the company's tremendous progress in transforming into a pure-play industrial company and expressed excitement about partnering with Lone Star to enhance scale, create opportunities for associates, and drive growth and innovation.
• Donald Quintin, CEO of Lone Star, expressed excitement to partner with Hillenbrand, recognizing it as a high-quality operator, and affirmed Lone Star's intention to leverage its industrial manufacturing expertise to invest in the business and foster growth.

Industry Context

This acquisition reflects a broader trend of private equity firms acquiring established industrial companies, particularly those with specialized, highly-engineered product portfolios serving attractive end markets like durable plastics, food, and recycling. Hillenbrand's strategic repositioning over the past three years, focusing on its industrial segments through acquisitions and divestitures, aligns with the value creation strategies often sought by private equity investors like Lone Star, who have a long track record in related industrial manufacturing.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess the acquisition price against global industry benchmarks. The premium is stated relative to Hillenbrand's own historical stock performance.

Legal Proceedings

• Potential litigation relating to the merger and the outcome of any such litigation.

Stakeholder Impact

• Shareholders: Will receive a significant cash premium for their shares, providing a favorable exit.
• Employees: Lone Star intends to invest in the business and foster continued growth and innovation, potentially creating new opportunities.
• Customers: Hillenbrand is positioned to continue meeting and exceeding customer needs for highly-engineered processing equipment and solutions.
• Company: Will transition from a publicly traded entity to a privately held company, allowing for potentially more long-term strategic focus away from quarterly public market pressures.

Next Steps

• Hillenbrand will file a proxy statement with the SEC, which will be sent to shareholders.
• Hillenbrand shareholders must approve the merger agreement.
• Required regulatory approvals must be obtained.
• The transaction is expected to close by the end of the first quarter of calendar year 2026.
• Upon closing, Hillenbrand's shares will be delisted from the New York Stock Exchange.

Key Dates

Recommendation

For existing shareholders, the recommendation is to hold shares to realize the announced $32.00 per share cash premium upon the expected closing of the acquisition. The definitive agreement at a substantial premium provides a clear and favorable exit. For new investors, any purchase would be an arbitrage play, with limited upside to the offer price and exposure to deal completion risks.

Keywords

Hillenbrand, Lone Star Funds, Acquisition, Merger, Industrial Equipment, Processing Equipment, Private Equity, NYSE, HI, Durable Plastics, Food Processing, Recycling Solutions