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July 17, 2019

Volume 3 Issue 4

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Hillenbrand to Buy Milacron for $2 Billion

Hillenbrand Inc. will acquire Milacron Holdings Corp. in a cash and stock transaction valued at $2 billion and expected to close in 2020’s first quarter, the companies announced last Friday. Milacron’s Fluid Technologies segment supplies metalworking and industrial fluids.

The deal is subject to customary closing conditions and regulatory approvals, including approval by Milacron shareholders.

Batesville, Indiana-based Hillenbrand Inc. is a global diversified industrial company with two main units: Its Process Equipment Group businesses design, develop, manufacture and service highly engineered industrial equipment around the world, while its Batesville unit manufactures and sells funeral service products in North America.

Milacron reported sales revenue of $1.26 billion in 2018, $129.3 million of which came from its Fluid Technologies segment. This accounted for about 12 percent of Milacron’s total revenue for 2018. During a presentation today, Hillenbrand said that 38 percent of Fluid Technologies revenue came from distributors, 28 percent from job shops and other customers and 23 percent from the automotive sector. “The fluids business is also a strong business, with good financial metrics and global presence,” Hillenbrand President and CEO Joe Raver said during a conference call and webcast last Friday.

Milacron CEO Tom Goeke during the conference call with analysts described the fluids business as a highly specialized provider of synthetic and semi-synthetic metalworking fluids. “We’re very niche, sell through distribution and have a very special position in delivering to smaller firms,” Goeke said. “It’s a very well protected business."

The majority of Cincinnati, Ohio-based Milacron’s business is in the manufacture, distribution and service of highly engineered and customized systems within the plastics technology and processing industry. Its Cimcool fluid technology unit makes metalworking fluids that are used in automotive, aerospace and other types of manufacturing. Products include precision metal removal fluids; rust preventatives; metal forming fluids; heating, ventilation and air conditioning specialty fluids; other specialty fluids; and productive process and maintenance cleaners.

Bloomberg reported on June 28 that Milacron might be considering a sale of the Cimcool unit – a report that the company refused to confirm or deny.

Private equity firm CCMP Capital Advisors acquired Milacron from Avenue Capital Group for an undisclosed amount in 2012, three years after a group led by New York-based Avenue Capital Group and Waltham, Massachusetts-headquartered DDJ Capital Management LLC purchased Milacron’s assets out of Chapter 11 bankruptcy for $175 million.