US specialty chemicals supplier DuBois Chemicals has agreed to buy Hillenbrand’s Cimcool fluid technology business.

Hillenbrand’s wholly owned subsidiary Milacron has entered into an equity and asset purchase agreement with DuBois, which will pay about $224 million cash for the business, subject to certain customary closing  adjustments.

In addition, DuBois will pay up to $26 million upon a future sale of the combined DuBois/Cimcool businesses, conditional upon DuBois’ ultimate sponsor receiving elevated levels of return on equity. The aggregate price is not to exceed $250 million should the conditions be met.

“We believe that this acquisition will allow us to increase our presence among significant customers and important segments,” said Jeff Welsh, president and CEO of DuBois. “The expanded product portfolio of the combined organization will also allow us to meet our customers’ evolving needs in new applications areas.

The transaction is expected to close on Mar. 30, subject to the usual conditions. Employee consultations may result in a second closing for the Dutch part of the business. If necessary, Milacron said it will operate the Dutch business for DuBois until that completes.

The sale follows Hillenbrand’s previously announced strategic review of alternatives for Cimcool, which was part of its approximately $1.9 billion acquisition of Milacron Holdings in November 2019. At the time of the purchase, Joe Raver, Hillenbrand’s president and CEO, said it was in the best interest of both companies to seek strategic alternatives for Cimcool, describing it as a “compelling business with strong cash flow characteristics.”

Raver said the sale proceeds will be used to deleverage and strengthen Hillenbrand’s financial position.