Hillenbrand inks $55M real estate deal for two Ohio properties
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Batesville-based Hillenbrand Inc. has entered into a $54.9 million sale-leaseback agreement for two industrial properties operated by its Ohio-based subsidiary, Milacron LLC, in that state.
In a public disclosure filed last week with the U.S. Securities and Exchange Commission, Hillenbrand agreed to sell the properties to two limited liability corporations affiliated with Chicago-based Blue Owl Real Estate Capital LLC.
The agreement calls for Hillenbrand to sell the two Ohio properties to Blue Owl for $54.9 million, then lease them back from Blue Owl for about $5 million per year. Milacron will remain at those locations but will occupy them as a tenant rather than as the property owner.
The lease has an initial term of 20 years and four optional renewal terms of five years each.
Hillenbrand makes and services industrial manufacturing equipment for a variety of sectors, including plastics and chemicals, recycling, food, and pharmaceuticals. In 2019, Hillenbrand acquired Milacron, which makes and services plastics processing equipment and is based in Batavia, Ohio.
Milacron has U.S. locations in Batavia and Mount Orab, Ohio; Norcross, Georgia; and McPherson, Kansas; and international sites in Mexico, India, Brazil and Germany.
The SEC disclosure does not specify a closing date for the transaction. IBJ left phone and e-mail messages for a company spokesperson Tuesday afternoon but did not receive an immediate response.
Hillenbrand said in the disclosure that it plans to use the sales proceeds for general corporate purposes, including repaying long-term debt.
The company has previously identified debt reduction as a high priority.
In its third-quarter financial report, issued in August, Hillenbrand reported net debt of $1.87 billion. Its ratio of net debt to adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, was 3.5X.
“Debt reduction remains our top priority for capital deployment, though our cash flow continues to be challenged by the weak demand environment,” Hillenbrand Chief Financial Officer Bob VanHimbergen said in the third-quarter report.
The company reported a third-quarter loss of $249 million, or $3.53 per share, on revenue of $787 million.