HI - Hillenbrand to buy Schenck Process' FPM unit for $730M enterprise value
2023-05-24 09:05:51 ET
Processing equipment and systems provider Hillenbrand ( NYSE: HI ) said Wednesday it will buy the Food and Performance Materials (FPM) business of Schenck Process for an enterprise value of $730 million.
Schenck Process is a portfolio company of Blackstone.
The deal, which is expected to close in the fourth quarter of 2023, will be accretive to Hillenbrand's adjusted EPS within the first full year and deliver an ROIC in excess of the cost of capital by year five.
The deal will be funded using cash on hand and cash available under Hillenbrand's revolving credit facility.
Once the deal closes, FPM will become part of the company's Advanced Process Solutions unit.
After the transaction closes, the company's projected net debt to adjusted EBITDA ratio is expected to be about 3.2x, and the company targets a net leverage range of 1.7x to 2.7x within 15 months of the deal closing.
Credit Suisse Securities ( USA ) LLC served as Hillenbrand's financial advisor for the deal.
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Hillenbrand to buy Schenck Process' FPM unit for $730M enterprise value