CINCINNATI—The rubber is hitting the road for Restoration Parts Group. Or at the very least rubber is becoming a much bigger part of the company's growth path.
The owner of a number of well-known brands in the classic car aftermarket, such as Mr. Mustang and Trim Parts, has acquired SoffSeal Inc., a Cincinnati-based rubber manufacturer of seals and other rubber parts for the industry. Financial terms were not released.
It is an acquisition that seems about “50 years in the making,” said Mitch Williams, Restoration Parts Group president and CEO. RPG was formed in 2012.
“If you look at our two main companies, one makes exterior vehicle trim parts and other manufactures interior vehicle trim parts for classic cars,” Williams said. “Where the interior meets the exterior, you need rubber. The last couple of years, we have had a foot in the rubber business, but with this (acquisition) we are jumping in with both feet.”
Jeff Hubert, former SoffSeal president and current Trim Parts general manager, said a deal with Trim Parts had been discussed for a couple of decades, long before Restoration Parts Group became the parent organization. In reality, SoffSeal had been looking for some acquisitions of its own before the deal with Trim Parts was finalized.
“The acquisition discussion formalized in January 2014, and we were finally acquired by Trim Parts in September,” Hubert said. “So, the short answer is 20 years.”
With the addition of SoffSeal, RPG has added another company to its ever-expanding family of companies, which already includes Trim Parts, Parts Unlimited Interiors, The Right Stuff Detailing, Mr. Mustang and First Place Auto Products. RPG is owned by Dubin Clark & Co. Inc., which owns leading automotive brands Flowmaster, Hurst Shifters, Hurst Driveline, B&M Racing and Dinan Engineering.
SoffSeal name to remain
SoffSeal's roughly 25 employees all will join the parent company, which is headquartered at the main facility for Trim Parts in Lebanon, Ohio. That employee base has “tremendous knowledge” that will help in the transition to a larger organization. The former SoffSeal employees will remain in Harrison, just outside of Cincinnati, at the company's 30,000-sq.-ft. manufacturing facility.
In addition, the SoffSeal brand will remain in place because of its intrinsic and ongoing value, Williams said. SoffSeal is considered as one of the leading brands in classic car weather stripping, rubber extrusions, and rubber seals. SoffSeal was founded in 1980. That nearly 35-year brand will not be replaced, he said.
“We are a great, logical fit to this group, so when the opportunity arrived, we knew it was the right way to grow in the market,” Hubert said. “This is great for our customers because it affords us the opportunity to grow our product lines quickly.”
In fact, with the New Year, the SoffSeal team is expecting to have 90 new products that have several full lines. By the spring, there will be well more than 100 parts, Hubert said. The acquisition will allow SoffSeal the opportunity to invest more in research and development and high-tech operations designed for greater efficiency and more client value, Williams said.
“The brand is so important, and there is a trust there with our customers so that won't change,” Williams said. “The legal name of the holding company will change, but what customers will see is an aggressive approach to new product development and visibility.
“You will be seeing SoffSeal out there at conferences and in the industry eye more often because we now have the capital to support a more active sales and marketing effort. This acquisition really connects our long-term strategy.”
The benefits of this deal allow SoffSeal to be better positioned for supply chain efficiency, more funded capital and the ability to leverage costs better, Williams said, giving the acquisition value on both sides.
Growth strategy on faster track
SoffSeal also manufactures custom-molded parts and rubber components such as pedal pads, bushings, grommets and seals.
By becoming part of the Trim Parts Holdings group, the SoffSeal team is moving its growth strategy timeline to the left by six months and significantly compressing the schedule. Hubert said. “What was going to take us three to five years to do is now going to take about half that time,” he added.
Restoration Parts Group originated in November 2012 and has experienced 400 percent revenue growth since inception. It is composed of six brands and four companies. Each of the companies originally was focused on supporting customers with collector General Motors vehicles, but its recent acquisition activity allows the parent company to provide parts for other automotive OEMs, such as Chrysler and Ford.
All companies and brands that comprise Restoration Parts Group use rubber in their production and manufacturing efforts, Williams said. SoffSeal traditionally has been in the classic car rubber business, but the added capital will allow it to invest in products that also meet the need of later car models, but not brand-new vehicles, he said.
SoffSeal also will continue to provide a limited amount of volume to support the rubber needs of other non-automotive vehicle OEMs such as fire trucks and golf carts, he added.
“We want to grow so that we can manufacture more applications for more vehicles,” Williams said.
Restoration Parts Group will remain in an acquisition mode and the parent company is confident that there are additional opportunities there in the rubber business for further expansion in the automotive sector, he said.
“If there are opportunities out there we will continue to be aggressive,” Williams said. “There are good companies out there that certainly can add to our portfolio.”