In a notable move within the industrial sector, Lone Star Funds, a prominent private equity firm, has agreed to acquire Hillenbrand Inc. for $2.3 billion in an all-cash transaction. Hillenbrand, headquartered in Batesville, Indiana, is a leading manufacturer of industrial equipment, specializing in sectors such as plastics, recycling, food, and industrial materials. The agreed purchase price of $32 per share represents a 30% premium over Hillenbrand’s last closing stock price, demonstrating Lone Star’s confidence in the target’s future potential. When factoring in Hillenbrand’s assumed debt of around $1.5 billion, the total enterprise value of the transaction is approximately $3.8 billion.
This acquisition is part of a broader trend of large-cap take-private deals in 2025, as the industrial sector continues to attract private equity interest. Lone Star Funds, which manages assets totaling $95 billion across private equity, credit, and real estate, has strategically positioned itself to acquire mature industrial businesses that offer stable cash flows and the potential for operational improvements. Hillenbrand has been in the process of refocusing its portfolio to enhance its status as a pure-play industrial systems provider, having divested non-core segments in recent years. This strategic shift aligns well with Lone Star's investment philosophy.
The transaction is expected to close by the end of the first quarter of 2026, pending necessary regulatory approvals. As the deal progresses, it will be crucial for both parties to navigate any antitrust considerations that may arise during the approval process.
For Hillenbrand’s stakeholders—including employees and shareholders—the acquisition may offer enhanced stability and growth opportunities within a focused industrial framework. Hillenbrand serves a diverse range of clients, including major brands like Honda, Toyota, Shell, and Nestlé, positioning it as a robust player in the industrial landscape.
In this transaction, Evercore has acted as the financial adviser to Hillenbrand, while Jefferies and UBS Investment Bank provided advisory services to Lone Star Funds. As the market awaits the completion of this significant deal, the implications for both companies and the broader industrial sector will be closely monitored.