Hillenbrand to be taken private in $3.8bn transaction

January 2026 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

January 2026 Issue

Hillenbrand Inc., a global industrial equipment manufacturer, has agreed to be acquired by Lone Star Funds in an all-cash transaction valued at approximately $3.8bn, including debt. The deal will take Hillenbrand private and marks a significant strategic shift for the Batesville, Indiana-based company.

Under the definitive agreement, Lone Star will purchase Hillenbrand shares for $32 each, representing a premium of about 37 percent over the unaffected closing price on 12 August 2025 and 53 percent above the 90-day volume-weighted average price prior to that date. The Hillenbrand board of directors unanimously approved the transaction after reviewing multiple strategic alternatives. Completion is targeted for the end of the first quarter of 2026, subject to shareholder approval and regulatory clearances.

“We are pleased to reach this agreement with Lone Star, which delivers immediate and certain cash value to our shareholders at a substantial premium to recent trading, and positions Hillenbrand to continue meeting and exceeding customers’ needs for highly-engineered, mission-critical processing equipment and solutions,” said Helen Cornell, chairperson of the board at Hillenbrand.

Over the past three years, Hillenbrand has transformed into a focused industrial operator, divesting non-core businesses and expanding its portfolio in food processing and recycling equipment. This included the sale of its Batesville casket division and majority stake in Milacron, alongside acquisitions such as Schenck Process’ food and performance materials business. The company now operates through two primary segments: Advanced Process Solutions and Molding Technology Solutions.

“Lone Star recognises this progress and sees a bright future, given our successful leading businesses and strong teams,” commented Kim Ryan, president and chief executive of Hillenbrand. “We look forward to working with Lone Star to enhance our scale, create opportunities for our associates, and continue to drive growth and innovation within the durable plastics, food and recycling end markets.”

Upon closing, Hillenbrand will become a privately held entity and its shares will be delisted from the New York Stock Exchange. Evercore is acting as financial adviser to Hillenbrand, with Skadden, Arps, Slate, Meagher & Flom LLP providing legal counsel. Lone Star is advised by Jefferies LLC and UBS Investment Bank, with Kirkland & Ellis LLP serving as legal counsel.

Lone Star Funds, established in 1995, manages over $85bn in assets across private equity, credit and real estate strategies. The firm has completed 58 private equity investments with an aggregate purchase price of approximately $59.5bn, focusing on industrials, chemicals and business services.

Recent developments suggest the transaction faces challenges. Several institutional investors have filed lawsuits questioning whether the $32 per share offer reflects optimal value, citing Hillenbrand’s recent revenue decline of 24 percent and adjusted earnings per share down 40 percent. Regulatory scrutiny also looms, with approval from the Committee on Foreign Investment in the United States (CFIUS) required due to potential national security considerations. The merger agreement includes reciprocal termination fees and an outside date of July 2026, allowing time to navigate these hurdles.

Despite these uncertainties, analysts maintain that the acquisition represents a logical conclusion to Hillenbrand’s strategic overhaul. For shareholders, the offer provides a clear exit at a premium, though the timeline may extend if litigation or regulatory delays persist.

The acquisition also underscores a broader trend of private equity firms targeting industrial technology businesses, driven by resilient demand, automation growth and sustainability imperatives, which continue to attract significant investor interest globally.

“We are excited to partner with Hillenbrand, a high-quality operator in the industrial equipment sector,” said Donald Quintin, chief executive of Lone Star. “Lone Star has a long track record in related industrial manufacturing, and our expertise will be brought to bear in partnering with Hillenbrand’s management team to invest in the business and help foster continued growth and innovation at the company.”

Fraser Tennant