Hillenbrand Industries, Inc. (NYSE:HB) said today in a press release that the company would consider splitting its healthcare and funeral businesses into two seperate publicly traded companies, after having evaluated strategic alternatives for the company.

According to the press release:

"Hillenbrand's Board of Directors and senior leadership recently evaluated a range of strategic alternatives, with input from its financial advisors Citigroup Corporate and Investment Banking and Goldman Sachs Group. These alternatives included the continuation of Hillenbrand's current operating structure, the sale of one or both of its businesses, returning cash to shareholders through an increase in balance sheet leverage, and the spin-off of or split off of one of its businesses. Having reviewed and fully endorsed the operating strategies presented at today's Investor Conference, management and the Board concluded that separating Hillenbrand's current operations into two publicly traded companies merits further, more detailed consideration as a means to position Hillenbrand's market-leading healthcare and funeral services businesses for sustained growth and value creation."

The company also has the full support of the Board as well as outside advisers that the company had hired to investigate the issue. The Chairman of the Board of Directors said:

"Under the leadership of Peter Soderberg, our new CEO, the management team has been working diligently to develop a motivating and achievable plan for growth for its two operating companies. I am pleased to report that the strategy we unveiled today has the enthusiastic support of the Board. Concurrently, the Board and management have been working with outside advisors to explore the alternatives available to enhance shareholder value and best assure achievement of our strategic vision. We believe the Board should undertake further exploration of the merits and mechanisms of a potential separation of the healthcare and funeral services businesses into two publicly traded companies."

Companies that restructure through splitting operations generally see significant gains as independent companies. By focusing on one area instead of many, companies are often able to cut costs and streamline operations while improving revenues through more effective marketing. This is especially true for unrelated businesses that exhibit little or no synergy within the same company. Combined, these factors make this company one to watch closely as the Board continues to investigate the possibility.

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