Hillenbrand Inc. CEO Kenneth Camp might have been content for his company to stick to the casket business, given its predictability.
But with the public?s preference for cremation gaining on casket burials, he knew the company needed a new way to grow. Now, nine months after Hillenbrand closed on the $435 million purchase of Pitman, N.J.-based K-Tron International Inc., which makes manufacturing equipment, Camp is more convinced than ever that diversification was the right move.
?Batesville Casket will always be the bedrock, but we think it?s the right time for us to use some of our existing tools in an industry that can be another leg on the stool,? Camp said in an interview this week.
Death rates in the U.S. will increase as baby boomers age, eventually providing a lift to casket sales. But the U.S. cremation rate is on the way up as well. It is the choice for 37 percent of deaths now following nearly three decades of growth, and by 2018 it could reach 50 percent. Batesville offers cremation urns, too, but doesn?t count on them generating anywhere near the revenue of caskets, since they?re a much less expensive product.
More acquisitions possible
K-Tron now makes up 25 percent of Hillenbrand?s revenue, giving it a significant hedge against a flat casket market. And that proportion stands to increase as K-Tron grows. Camp wouldn?t say how much revenue he thinks K-Tron could eventually contribute, but he said that company will consider additional, smaller acquisitions to build up the business.
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