IK to sell Linxis Group to Hillenbrand for EUR 572m

IK Partners' IK VIII Fund, via its affiliate Iberis International, entered into a put option agreement with Hillenbrand. Upon completion of required works council consultations, the parties expect to enter into a definitive purchase agreement, with closing expected before the end of the year, subject to regulatory approvals, according to a press release from the buyer.

Hillenbrand expects to use committed debt financing, cash on hand and cash available under its revolving credit facility to fund this acquisition.

Mergermarket first reported in April that Linxis planned to collect first-round bids at the end of that month. Debtwire coverage on the sale from 30 November 2021 identified Jefferies and Lazard France as advisors and described preliminary expectations on FY22 EBITDA of around EUR 70m.

Linxis expects the calendar year 2022 revenue of approximately EUR 300m with mid-teen EBITDA margins, according to a press release from the buyer.

IK acquired the group, formerly known as Breteche Industrie, from Equistone in October 2017 via its eighth mid-market buyout vehicle, IK VIII, which held a final close on its EUR 1.85bn hard-cap in November 2016, according to Unquote Data.

Under IK's ownership, the company completed add-on acquisitions, including Unifiller in 2018 and Laramore, Bakon and Shaffer in 2021. This, coupled with developing the product offering and its cross-selling capabilities, as well as the introduction of an operational excellence programme, has allowed for growth and global expansion, according to a press release from the seller.

Upon completion of this transaction, Linxis Group will join Hillenbrand's compounding and extrusion, materials handling and service brand, Coperion, and its screening equipment and technology brand for the process industries, Rotex, as part of the company's Advanced Process Solutions (APS) segment. The APS segment provides industrial equipment and systems and aftermarket parts and services for a variety of end markets and applications, according to a press release from the buyer.

Linxis will continue to build upon Hillenbrand's growth strategy by further strengthening and accelerating its position in the food end market through cross-selling opportunities in key geographies and enhancing the technical capabilities of its products and service offerings. By leveraging the combined capabilities of the Coperion brand and the Linxis brands, the acquirer will be able to offer more comprehensive processing solutions, according to a press release.

Company
Founded in 1988 and headquartered in Nantes, France, Linxis is global supplier of industrial processing equipment and automation solutions for the food, pharma and cosmetic industries. The group consists of six brands – VMI, Diosna, Shaffer, Shick Esteve, Unifiller and Bakon – with more than 1,100 employees collectively. Operating various design and assembly facilities in Europe and North America, it serves thousands of customers across 100 countries, specialising in the design, installation and maintenance of mission-critical equipment. LINXIS is organised around three complementary business units: Mixing Technology, Ingredient Automation and Portion Process.

People
LINXIS Group − Tim Cook (CEO).
IK Partners − Rémi Buttiaux (managing partner and advisor to the IK VIII Fund).
Hillenbrand − Kim Ryan (president and CEO).

Advisers
Hillenbrand − Linklaters LLP (legal), SMBC Nikko (corporate finance).
Linxis Group – Jefferies (Ritika Langer − managing director in industrials investment banking; Matthew Bowersox − US head of packaging; Arnaud Fornas − head of investment banking advisory for France), Lazard France (corporate finance).

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