Last month, Hillenbrand announced the purchase of Coperion Capital, a German material handling equipment maker. The company's largest acquisition to date, at an estimated $550 million, further moves the company away from the funeral industry.
Hillenbrand did pay a price for its latest acquisition, including assumption of nearly 200 million euros in net debt and pension liabilities, in the form of an S&P credit downgrade to BBB-.
The company ended 2012 with just $20 million in cash (down from $115 million last year), and $272 million in debt (down from $432 million.) It's not a stellar balance sheet, and we've yet to see the effect of the Coperion deal.
Hillenbrand estimated that with the new acquisition in place, the Process Equipment Group will generate more than $1 billion in annual revenue (up from $376 million in 2012), with a compounded annual growth rate better than 30% in the coming years.Hillenbrand has popped up on one of my value related screens within the past year; one that focuses on small and mid-cap stocks with solid net profit margins, reasonable price-earnings ratio and growing, sustainable dividends. The company currently yields a solid 3.8%, and trades for 12 times trailing earnings, and 9 times 2014 consensus estimates. HI data by YCharts
We'll have to wait and see how the Coperion acquisition works out. With the move away from the funeral industry, I also wonder whether the company will put Batesville up for sale. At the time of publication the author held no positions in any of the stocks mentioned. Follow @JonMHellerCFA This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV