Hillenbrand To Buy K-Tron For $433M

Casket maker Hillenbrand Inc. agreed to buy the manufacturer K-Tron International on Monday for about $433 million in cash.

BATESVILLE, Ind. (AP) -- Casket maker Hillenbrand Inc. agreed to buy the manufacturer K-Tron International Inc. on Monday for about $433 million in cash.

The deal gives K-Tron shareholders a 32 percent premium over last week's close and K-Tron shares climbed more than 30 percent in midday trading.

K-Tron, which is based in Pitman, N.J., makes industrial feeders and pneumatic conveyers. Hillenbrand owns the Batesville Casket Co. and makes cremation products.

"We are delighted K-Tron will be joining the Hillenbrand family of companies," Hillenbrand CEO Kenneth A. Camp said in a statement. "Although K-Tron's products differ from ours, we are both manufacturing companies that share similar processes and core operational values."

The agreement calls for Hillenbrand to pay $150 for each K-Tron share. K-Tron had about 2.89 million shares outstanding, according to its most recent regulatory filing.

K-Tron shares climbed $34.75, or 30.6 percent, to $148.27 in midday trading after rising to a 52-week high of $148.70. Hillenbrand shares fell 54 cents, or 2.8 percent, to $18.94.

Under the terms of the deal, which has been approved by boards of directors at the two companies, K-Tron will operate as a subsidiary of Hillenbrand, which is based in Batesville, Ind. Its executives will remain at the unit's helm and it continue to be headquartered in New Jersey

Adjusted for K-Tron debt and cash on hand at October 3, 2009, the estimated net purchase price of the deal is approximately $390 million, Hillenbrand said.

The deal is expected to be completed by March.

Hillenbrand will use cash on hand as well as proceeds from debt financing, to fund the deal. Executives said it will begin adding to the company's earnings per share this year.

The agreement still needs regulatory and shareholder approval, although executives and board members holding at least 10 percent of K-Tron's outstanding shares have already agreed to the transaction.

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