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Hillenbrand Industries to spin off Hill-Rom business
By Lisa Kerner
Charlotte, N.C., May 10 - Hillenbrand Industries, Inc.'s board of directors approved a plan to spin off the company's Hill-Rom medical technology business through a tax-free dividend of its shares to Hillenbrand shareholders within the next nine months.
The company's funeral products business, Batesville Casket, would become the sole operating unit of Hillenbrand Industries, remaining publicly traded under the Hillenbrand Industries name.
"By operating independently, each company can adopt an appropriate capital structure to allow it to better execute its business plans," president and chief executive officer Peter H. Soderberg said in a company news release.
"The separation would also allow each company to utilize its own equity as currency for strategic purposes. As two focused companies, Hill-Rom and Hillenbrand Industries (Batesville Casket) would be better positioned for investors looking for specific industry, valuation, yield, and growth profiles."
The separation plan keeps the current management team of each company in place. Soderberg will lead Hill-Rom, and Hillenbrand Industries (Batesville Casket) would be led by Kenneth A. Camp.
Following the separation, Hillenbrand Industries shareholders would own shares in both entities. The transaction is conditioned on final approval by the board, regulatory approvals and completion of necessary debt refinancing.
Until the transaction is completed, Hillenbrand expects to pay its current quarterly dividend of $0.285 per share, the release stated.
Citi served as lead financial adviser, and Goldman, Sachs & Co. was co-adviser to the Batesville, Ind., company.
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