Batesville, Indiana-based industrial distributor Hillenbrand Inc. has entered into a definitive agreement to acquire Schenck Process Food and Performance Materials (FPM) for approximately $730 million, the company announced May 24. FPM is currently a portfolio company of New York-based private equity firm Blackstone.
Based in Kansas City, Missouri, FPM has 1,300 employees globally and sells to customers in over 150 countries, generating approximately 85% of its revenue in North America. FPM specializes in the design, manufacturing and service of feeding, filtration, baking and material handling technologies that are highly complementary to the equipment and solutions offered by Hillenbrand’s Advanced Process Solutions segment, according to a news release. Upon closing, FPM will join the Advanced Process Solutions segment.
“With this acquisition, we further strengthen our leadership across the attractive, growing end markets of food, durable plastics and chemicals, through strong brands that enhance the breadth of our technology and service capabilities,” Hillenbrand President and CEO Kim Ryan said in the release. “By combining the applications and systems processing expertise of our Advanced Process Solutions segment with FPM, we will be positioned to offer greater value to our customers and drive scale benefits across manufacturing, engineering, and procurement.”
Hillenbrand plans to use cash on hand and cash available under its revolving credit facility to fund the acquisition, according to the release. The deal is expected to close during Hillenbrand’s fiscal fourth quarter of 2023, subject to customary closing conditions.
FPM is Hillenbrand’s first acquisition of 2023 after the industrial distributor made four bolt-ons — LINXIS Group, Peerless Food Equipment, Gabler Engineering and Herbold Meckesheim — in 2022. Hillenbrand also divested its death care segment, Batesville Casket Company, earlier this year as the company shifts its focus to purely industrial.
Hillenbrand Reports Fiscal 2Q Results
On May 8, Hillenbrand reported financial results for its fiscal second quarter, which ended March 31, 2023. The company posted 2Q revenue of $691 million, up 22% year-over-year, while organic revenue from continuing operations was up 9% year-over-year.
Adjusted EBITDA of $109 million increased 8% year-over-year, while adjusted EBITDA margin of 15.7% fell 200 basis points year-over-year due to unfavorable product mix and the dilutive effect of acquisitions, according to a news release.
“Overall, our performance for the second quarter was ahead of our expectations, with strong orders in our Advanced Process Solutions segment and sequential improvement in our Molding Technology Solutions segment,” Ryan said in the release. “We exited the quarter with record backlog and continued to see strong demand for aftermarket parts and service, though demand for our high margin hot runner equipment remained soft, in line with our expectations.”