Lone Star Funds' $3.8bn Acquisition of Hillenbrand
- amansp2006
- Nov 28
- 6 min read
By Harvey Han, Utku Kaya, Omar Kanaa, Nayoung Kim, Tomiwa Oshai (King’s College London) and Nikhil Freiherr Raitz Von Frentz, Max Fischer, Daniel Barker, Moritz Ibe (University of St Andrews)
Photo: Getty Images (Unsplash)
Overview of the deal
Acquirer: Lone Star Funds
Target: Hillenbrand Inc.
Implied Equity Value: $3.8 billion ($32 per share)
Total Transaction Size: $3.8 billion (All-cash)
Closed date: The end of 1Q 2026 (Expected)
Target Advisors: Jefferies LLC, UBS Investment Bank (Financial); Kirkland & Ellis (Legal)
Acquirer Advisors: Evercore (Financial); Skadden, Arps, Slate, Meagher & Flom LLP (Legal)
On October 15, 2025, Hillenbrand, a global manufacturer serving durable plastics, food, and recycling markets, announced that Lone Star Funds will acquire the company in an all-cash transaction at US $32.00 per share, valuing the business at approximately US $3.8 billion. The all-cash structure is designed to deliver immediate and certain value to shareholders in a challenging macro environment. Hillenbrand’s customers have been delaying orders in response to tariff uncertainty, contributing to year-on-year revenue pressure (quarterly revenues fell to US $599 million). In this context, a cash transaction helps eliminate execution risk for shareholders, while giving the company strategic flexibility outside the public markets.
Meanwhile, for Lone Star, the asset is highly attractive. The business has been deliberately re-positioned through divestments of non-core assets, including Batesville Casket selling funeral products, which has sharpened Hillenbrand into a pure-play engineered processing equipment manufacturer serving end-markets. This will improve pricing power and make the business simpler for Lone Star to underwrite.
The all-cash format enables Hillenbrand’s shareholders to exit at a premium (about a 37% premium over the company’s unaffected closing share price on August 12, 2025) and allows Lone Star to take the company private and execute long-term operational initiatives away from public-market pressures.
“We are excited to partner with Hillenbrand, a high-quality operator in the industrial equipment sector, Lone Star is fortunate to have 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." - Donald Quintin, Chief Executive Officer of Lone Star Funds.
Company Details (Acquirer - Lone Star Funds Group)
Founded in 1995, Lone Star Funds is a global private investment firm focused on value-oriented strategies across private equity, credit, and real estate—deploying its $95 billion in aggregate capital commitments since inception across 25 funds. The firm targets complex and dislocated asset situations, typically involving underappreciated businesses facing operational or structural challenges. Rather than over-relying on multiple expansion or broader market tailwinds, it creates long-term value by providing the capital and expertise enabling revenue growth, improved margins, cash generation, and M&A. It’s recognised for its ability to execute in challenging environments, hands-on portfolio management, and ability to deploy capital across geographies and asset classes.
Founded in 1995, headquartered in Dallas, Texas, United States
CEO: Donald J. Quintin
Number of employees: 84 (website)
Market Cap: N/A (Privately held, no statements published)
EV: N/A
LTM Revenue: N/A
LTM EBITDA: N/A
LTM EV/Revenue: N/A
LTM EV/EBITDA: N/A
Recent Transactions: $2.3bn sale of AOC to Nippon Paint Holdings (Mar 2025); $Undisclosed acquisition of RadiciGroup’s Specialty Chemicals & High Performance Polymers business (Feb 2025); $3.0bn acquisition of Carrier Global’s Commercial & Residential Fire business (Dec 2024)
Company Details (Target - Hillenbrand Inc.)
Hillenbrand, Inc., headquartered in Batesville, Indiana, is a diversified industrial company founded in 1906. It operates through two main segments: Advanced Process Solutions, which designs and manufactures processing and material-handling equipment for industries such as plastics, food, chemicals, and recycling; and Molding Technology Solutions, which provides injection molding and extrusion systems, hot runners, and aftermarket services for sectors including automotive, packaging, and healthcare. Hillenbrand’s engineered products and technologies support complex manufacturing processes across a broad range of industrial applications worldwide.
Founded in 1906, headquartered in Batesville, Indiana (USA)
CEO: Kimberly K. Ryan (Since 2021)
Number of employees: Approx. 10,450 (as of September 30, 2024)
Market Cap: $2.228bn (as of November 6, 2025)
EV: $3.87bn
2025 Q3 LTM Revenue: $2.86bn
LTM EBITDA: $418m
LTM EV/Revenue: 1.35x
LTM EV/EBITDA: 8.51x
Projections and Assumptions
Short-Term Consequences
The $3.8bn take-private acquisition of Hillenbrand by Lone Star Funds at $32 per share, with an implied valuation of 8.96x Pro Forma LTM EBITDA. The acquisition price represents a 37% premium to the August 12, 2025, share price and a 53% premium to the 90-day VWAP. Upon completion, Hillenbrand will be delisted from the NYSE.
From Hillenbrand’s shareholder perspective, the transaction offers immediate, all-cash certainty to exit amid ongoing tariff uncertainty.
Customers have exhibited “cautious order behavior” and delayed project decisions due to prolonged tariffs and a high-interest environment, as Hillenbrand reported a 24% year-over-year revenue decline in Q3 2025 to $599 million, down from $787 million in Q3 2024.
From a strategic perspective, marked by the sale of Batesville Casket Company in March 2023, Hillenbrand shifted the enterprise’s focus to end-consumer markets, including durable plastics, food processing, and recycling, aiming to build out its Advanced Process and Molding Technology segments. This shift is reflected in increased M&A activity and capital investment for the past 3 years, which have intensified the company’s near-term cash constraints.
Overall, the acquisition by Lone Star Funds will provide a cash infusion to help mitigate near-term revenue decline and increasing capex requirements, while supporting Hillenbrand’s operational modernization and supply chain localization as it transitions from the enterprise’s legacy business model into a “pure-play industrial company”.
Long-Term Upsides
The acquisition is expected to support Hillenbrand’s ongoing strategic repositioning toward higher-margin, scalable industrial processing technologies. As a private company under Lone Star, Hillenbrand will be able to accelerate operational initiatives without the constraints of being a public company. This could include simplifying its portfolio, consolidating manufacturing footprints and prioritizing product lines with stronger high-margin after market revenue. Hillenbrand’s established base in plastics and material processing provides durable demand tied to global manufacturing, packaging, and recycling trends. With private ownership enabling longer investment cycles, the company will be better positioned to capitalize on shifting market dynamics, advance its equipment platforms and expand service and after market offerings.
The transaction also aligns with broader consolidation in engineered materials and processing equipment, where scale and integrated product ecosystems are increasingly necessary to serve customers seeking efficiency and lower total cost of ownership. Lone Star’s capital support may facilitate targeted bolt-on acquisitions in complementary automation, controls, and material handling technologies, reinforcing Hillenbrand’s ability to offer full service system solutions. Leveraging both parties' expertise and resources, their collaboration can enhance competitive positioning and increase cross-sell opportunities across end-markets.
If executed effectively, the acquisition provides a pathway for Hillenbrand to improve financial stability, strengthen competitive positioning in advanced processing technologies, and unlock substation growth throughout the holding period.
Risks and Uncertainties
Seeing that the deal is expected to close in the first quarter of 2026, it is still dependent on shareholder and regulatory approval. Increasing interest rates could impact clients’ abilities to pay as large capital projects could require loans. Increased interest rates make such investments less attractive and could slow revenue growth for Hillenbrand. The acquisition price is at a 37% premium which reflects the high growth expectations. If operational synergies do not materialise Lone Star Funds may find it difficult to justify the premium paid for. The PE firm must also consider that there may be a turnover in senior management and technical staff which could disrupt continuity.
Hillenbrand’s revenue depends on industrial capital spending, which is cyclical in nature and has softened over the past year because of slower manufacturing growth in Europe and China. Their machinery uses steel, electronics, and precision components, all exposed to pricing dynamics and logistical bottlenecks that can erode margins or even increase prices for customers. Tariffs, such as those imposed by President Trump since assuming office in January 2025 could certainly impact supply chains or reduce global demand. As Hillenbrand operates across several industrial segments, each requires different technologies, supply chains, and customer bases. The process of making their product base more efficient could prove to be time consuming. Finally, Hillenbrand’s competition also poses a risk. They may pursue mergers or capacity expansions. This is how Hillenbrand scaled, acquiring Herbold Meckesheim in 2022. Competitor Amcor for instance acquired Berry Global in April 2025.