Private equity is targeting "pure industrial" Hillenbrand (HI.US) plastic industry platform enters the privatization moment.

According to media reports citing informed sources, private equity leader Lone Star Funds is in deep acquisition negotiations with plastic components and equipment manufacturer Hillenbrand Inc. The information provided by informed sources indicates that this private equity company may announce the acquisition of Hillenbrand in Batesville, Indiana, as early as this week. Hillenbrand (HI.US) closed at $26.49 on the New York Stock Exchange on Tuesday, giving the company a market value of about $1.87 billion. The stock has dropped more than 10% this year, significantly underperforming the S&P 500 index. Following the news of the potential acquisition, Hillenbrand's stock price rose nearly 7% in after-hours trading. Recent media reports have indicated that Hillenbrand has been exploring selling the company, as it is currently operating at a GAAP loss. Sources say that negotiations regarding the acquisition are still ongoing, and the deal may be delayed or fall through. Representatives from Lone Star declined to comment, and Hillenbrand did not respond to multiple requests for comment. Public records show that Hillenbrand produces essential plastic components and related equipment for industries such as automotive, packaging, construction, and electronics. The company's website lists clients such as Dow Inc. and General Mills Inc. In recent years, Hillenbrand has been reshaping its asset portfolio to become a "pure-play industrials" plastics manufacturing company. As part of this strategy, the company sold its Batesville casket business in 2023. That same year, Hillenbrand acquired Schenck Process Food and Performance Materials for approximately $730 million from private equity giant Blackstone Inc., further expanding its processing and manufacturing sectors. Headquartered in Batesville, Indiana, industrial technology company Hillenbrand has transitioned to providing high-end, critical-process materials and plastic products, along with associated processing equipment and systems, spare parts, and aftermarket services. Hillenbrand has two main business segments: APS, which covers well-known brands like Coperion, focuses on plastic industry blending and extrusion, bulk/solid conveying, screening, and batching, serving end markets like food, durable plastics, and chemicals; and MTS, which covers brands like Milacron, Mold-Masters, and DME, focuses on injection molding and extrusion equipment, hot runner systems, standardized mold components, and a wider range of aftermarket products. It is worth noting that in February 2025, Hillenbrand sold a 51% stake in Milacron's injection molding and extrusion business to an affiliate of Bain Capital under special circumstances but retains 49%. Lone Star, with a long history, was founded in the 1990s and invests globally in private equity, private credit, and real estate. The company's website indicates that it manages assets of approximately $95 billion. Analysts believe that for Hillenbrand, being taken over by a private equity firm can accelerate value creation, especially with its equipment and aftermarket cash cow properties, making it suitable for a leveraged acquisition model. Hillenbrand has already completed the first round of "sell non-core and strengthen core" (selling Batesville, buying FPM, and disposing of Milacron holdings). In a privatized environment, without the pressure of quarterly financial reports, it is easier to reorganize assets, streamline product lines, optimize capacity and regions, especially with a strong installed base, high proportion of spare parts/services, and strong order retention. This can support more predictable EBITDA and cash flow recovery, fitting naturally with PE's common path of "operational improvement + financial leverage," allowing PE to polish the portfolio into a stronger cash flow and lower discount rate industrial platform.