USA- Indiana-based processing equipment and solution provider Hillenbrand recently announced plans to acquire Schenck Process’ Food and Performance Materials (FPM) for approximately US$730 million.
The transaction is expected to close during Hillenbrand’s fiscal fourth quarter of 2023, subject to regulatory approvals and other customary closing conditions.
According to a press release by the company, Hillenbrand expects to use cash on hand and cash available under its revolving credit facility to fund the acquisition.
“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,” said Kim Ryan, President and CEO of Hillenbrand.
FPM is a portfolio company of private investment firm Blackstone that develops, manufactures, markets, and sells a full range of solutions, products, and systems for the food, chemicals, and performance industries.
Headquartered in Missouri, US, FPM has over 1,300 global employees and consumers in over 150 countries, with approximately 85% of the company’s revenues generated in North America.
The company specializes in the design, manufacturing, and service of feeding, filtration, baking, and material handling technologies and systems that complement the equipment.
Similar solutions are currently offered in Hillenbrand’s ‘Advanced Process Solutions’ segment.
According to Hillenbrand, upon closing, FPM will become part of the ‘Advanced Process Solutions’ segment, where the company expects FPM to generate US$540 million in revenue in 2023.
“FPM is a leading provider of pet food processing systems in North America, and expands our presence across a number of other key customer applications, including baked goods and other processed foods, as well as chemicals and engineering plastics,” Ryan said.
Hillenbrand holds that the acquisition immediately improves its portfolio of attractive food categories, including pet food, through FPM’s strong brands and technologies.
“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,” Kim Ryan remarked.
In Hillenbrand’s press release, the company has acquired high-quality industrial businesses that serve large, attractive end markets underpinned by long-term, secular growth trends in the last twelve months.
Among the company’s previous acquisitions were the Peerless Food Equipment division of Illinois Tool Works Inc. in December and Germany-based recycling equipment manufacturer Herbold Meckesheim GmbH last July.
“These actions have significantly transformed Hillenbrand into a global leader in highly-engineered, mission-critical industrial processing solutions. I am confident this transaction further positions us to deliver compelling long-term shareholder value,” the statement read.