Press Releases
Hillenbrand Industries to |
Separation creates opportunity for faster growth and enhanced value
for shareholders, customers and employees
BATESVILLE,
“Hillenbrand Industries
Peter H. Soderberg, president and CEO of Hillenbrand Industries, said, “By operating independently, each company can adopt an appropriate capital structure to allow it to better execute its business plans. 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.”
Mr. Soderberg continued, “The plan to separate these two companies is consistent with our strategy to create focused, mission-driven enterprises that can each achieve their business objectives and better pursue growth opportunities in their respective markets. As independent and focused companies, each would be better able to compete for, attract and retain talent. For employees, the separation would create opportunities to grow with two industry leaders and more directly impact performance of their corporate parent. The Board, management teams and I look forward to this new and exciting chapter for each company.”
Under the plan, the current management team of each company would remain in place. Hill-Rom would be led by Peter H. Soderberg, and Hillenbrand Industries (Batesville Casket) would be led by Kenneth A. Camp.
Immediately after the separation, Hillenbrand Industries shareholders would own shares in both entities. The transaction will be subject to the final approval of the Board of Directors, favorable market conditions, receipt of a tax ruling from the IRS or tax opinions, filing and effectiveness by Hill-Rom of a registration statement with the U.S. Securities and Exchange Commission (SEC), completion of necessary debt refinancings and other customary conditions. Hillenbrand Industries will retain its listing on the New York Stock Exchange and Hill-Rom would intend to apply to list its shares on the New York Stock Exchange.
Upon separation, each company should enjoy sufficient financial strength and flexibility to achieve its objectives. Subject to review by independent rating agencies, it is intended that upon separation, each company’s financial policies, credit metrics and balance sheets would be commensurate with investment grade credit ratings. In addition, the total dividends of the two companies would be at least equal to the current dividend paid by Hillenbrand Industries. Until the transaction is completed, Hillenbrand expects to pay its current quarterly dividend of $0.285 per share. In order to preserve the economic status quo of claimants involving uninsured claims against Hillenbrand Industries and either Hill-Rom or Batesville Casket at the time of the spin-off, each of Hill-Rom and Batesville Casket proposes to indemnify Hillenbrand Industries to the extent that Hillenbrand Industries and its co-party are unable to satisfy any such claim.
Hillenbrand’s Board of Directors and Hillenbrand’s lead financial advisor was Citi, and Goldman, Sachs & Co. was co-advisor.
ABOUT HILLENBRAND INDUSTRIES, INC.
Hillenbrand Industries is organized into two operating companies serving the health care and funeral services industries.
Hill-Rom is a leading worldwide manufacturer and provider of medical technologies and related services for the health care industry, including patient support systems, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals, and information technology solutions. Hill-Rom’s comprehensive product and service offerings are used by health care providers across the health care continuum in hospitals, extended care facilities and home care settings to enhance the safety and quality of patient care.
Hill-Rom…enhancing outcomes for patients and their caregivers.
Batesville Casket Company is a leader in the North American death care industry through the sale of funeral services products, including burial caskets, cremation caskets, containers and urns, selection room display fixturing and other personalization and memorialization products.
Batesville Casket Company…helping families honor the lives of those they love.
Disclosure Regarding Forward-Looking Statements
Certain statements in this press release contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the Company's future plans, objectives, beliefs, expectations, representations and projections. The Company has tried, wherever possible, to identify these forward-looking statements using words such as "intend," "anticipate," "believe," "plan," "encourage," "expect," "may," "goal," "become," "pursue," "estimate," "strategy," "will," "projection," "forecast," "continue," "accelerate," "promise," "increase," “higher,” “lower,” “reduce,” “improve,” “expand,” “progress,” “potential” or the negative of those terms or other variations of them or by comparable terminology. The absence of such terms, however, does not mean that the statement is not forward-looking. It is important to note that forward-looking statements are not guarantees of future performance, and the Company's actual results could differ materially from those set forth in any forward-looking statements. Factors that could cause actual results to differ from forward-looking statements include but are not limited to: the Company's dependence on its relationships with several large national providers and group purchasing organizations, changes in death rates, whether the Company's new products are successful in the marketplace, changes in customers' Medicare reimbursements, collections of accounts receivable, the success of the implementation of the Company's enterprise resource planning system, compliance with FDA regulations, antitrust litigation, potential exposure to product liability or other claims, failure of the Company's announced strategic initiatives and restructuring and realignment activities to achieve expected growth, efficiencies or cost reductions, disruptions in the Company's business or other adverse consequences resulting from the planned separation of the Company's two operating companies, failure of the Company to execute its acquisition and business alliance strategy through the consummation and successful integration of acquisitions or entry into joint ventures or other business alliances, competition from nontraditional sources in the funeral services business, volatility of the Company's investment portfolio, increased costs or unavailability of raw materials, labor disruptions, the ability to retain executive officers and other key personnel, and certain tax-related matters. For a more in depth discussion of these and other factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the period ended September 30, 2006. The Company assumes no obligation to update or revise any forward-looking statements.