Mar 19, 2024

Machinery firms continue strong M&A trends in 2023

Someone forgot to tell plastics machinery companies that the mergers and acquisitions market was slowing down.

Those firms made three deals in the first half of 2023. Batesville, Ind.-based Hillenbrand Inc. continued its transformation by acquiring Schenck Process Group's Food and Performance Materials (FPM) business for $730 million. The deal increases Hillenbrand's scale in the food, plastics and chemicals end markets.

Based in Kansas City, Mo., FPM makes processing equipment and systems for feeding, filtration, baking and material handling at facilities in the U.S., United Kingdom, Thailand and Brazil that employ about 1,300.

About 65 percent of FPM sales are to the food market — almost half of that to pet food — with the rest in chemicals and performance materials.

"While these markets may seem dissimilar, they actually share a common backbone of similar products, technology and processing requirements," Hillenbrand President and CEO Kim Ryan said in a May 24 conference call about the company's fourth acquisition since June 2022.

FPM, once a portfolio company of Blackstone, is expected to generate $540 million in sales in 2023. That would push Hillenbrand sales up to about $3.3 billion with more than 25 percent from food and recycling markets.

Hillenbrand has been expanding in those markets, buying food extrusion equipment provider Gabler in June 2022, followed by plastics recycling equipment provider Herbold in September, mixing and automation provider Linxis Group in October, then food processing equipment provider Peerless in December.

Hillenbrand has owned injection molding machinery maker Milacron since 2019. Also in December, Hillenbrand announced it was selling its Batesville burial and cremation subsidiary to an affiliate of private equity firm LongRange Capital for $761.5 million.

FPM equipment complements Hillenbrand's Advance Process Solutions business segment, particularly the brand lines of Coperion for pellet production and Linxis for ingredient processing.

"This will enable us to drive additional scale benefits across numerous key functions, such as engineering, manufacturing and procurement, while also creating enhanced value for our customers through a more comprehensive offering," Ryan said.

In a second deal, Berlin-based extrusion blow molding machine builder Bekum Maschinenfabriken GmbH acquired the pultrusion business unit of financially struggling systems provider ProTec Polymer Processing GmbH. The deal will allow Bekum to move into the fiber-reinforced plastics market.

Bekum officials said they're setting a course for further growth with the deal, which includes ProTec Polymer Processing Shanghai, a part of the business unit that sells systems to the Chinese market for producing longer fiber-reinforced thermoplastic (LFT) pellets and compounds.

Pultrusion, or strand drawing, produces LFTs in granulate form for manufacturing lightweight components. Bekum officials added that the acquisition offers their firm more opportunities in the auto and electric vehicle markets. Terms were not disclosed.

In a third first-half machinery deal, Yushin Precision Equipment Co. Ltd. acquired Värnamo, Sweden-based Wemo Automation AB, a maker of linear robots and automation cells for injection molding.

Kyoto, Japan-based Yushin bought the business from Rheinböllen, Germany-based Hahn Group GmbH. Yushin sells similar takeout robot products in Asia and North America and will operate Wemo as a subsidiary.

Founded in 1987, Wemo posted 2022 sales of $11.5 million. Hahn officials said it was time to find Wemo and its standardized products a new partner. Hahn now will focus on selling tailormade factory automation to its customers.

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