PARAGOULD, Ark.—GRT Rubber Technologies L.L.C., a newly formed business funded by an investment group, has purchased Garlock Rubber Technologies from EnPro Industries Inc. for about $44 million.
The investor group was led by Main Street Capital Corp. and includes members of Garlock Rubber's management team. Main Street Capital is an investment firm that provides long-term equity and debt capital to lower-middle and middle market companies.
Houston-headquartered Main Street Capital is funding $29.8 million of the investment, including $16.7 million in first lien, senior secured term debt and $13.1 million for a control equity ownership position in the acquired business.
Its portfolio investments typically are made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors.
GRT Rubber Technologies will become Garlock Rubber's new official name. The company will continue to be headquartered at its 142,000-sq.-ft. plant in Paragould, which includes a comprehensive rubber compounding laboratory, according to President David Brown, who's also an investor in the business.
The firm's management team and work force of between 80 and 90 will remain on board, he said. “Pretty much everything remains the same.”
He said the sale has been in the works for about a year, noting it was something that has been talked about even before that.
Brown will remain as president of the Paragould-based company, which he said will continue to manufacture an extensive line of engineered products, including conveyor belts, sheet rubber products used for sealing, and protection and cushioning products for a variety of industries.
However, with the new investor group taking the lead, he sees the purchase as an opportunity for GRT to grow and expand—certainly organically—with greater focus on the development of its product lines.
In terms of future acquisitions, he said, that depends on a lot of factors. “If we find something that we think would be a good fit, we will look at it as well.”
EnPro, based in Charlotte, N.C., sold Garlock Rubber, which was founded in 1880, because the division wasn't part of the company's core operations, an EnPro spokesman said about the deal.
Garlock Sealing Technologies L.L.C., a producer of seal and gasket products, is not part of the transaction.
With Garlock Rubber out of the picture, EnPro's primary businesses include operations that produce sealing products, metal polymer and filament wound bearings, components and services for reciprocating compressors, diesel and duel-fuel engines, and other engineered goods.
To support growth in its core operations, in late December EnPro acquired Oxford, Mass.-based Fabrico Inc., a producer of highly engineered products for the land-based turbine industry, from Fabrico Holding Co. L.L.C.
Fabrico will become part of EnPro's Technetics Group, a producer of high performance sealing and other products for the aerospace, semiconductor, power generation, and oil and gas markets.
“The acquisition of Fabrico and the divestiture of GRT represent a concerted effort to reallocate capital to businesses that are central to EnPro's growth,” said Steve Macadam, president and CEO of EnPro. He said the divestiture of GRT will provide it with a new focus on future opportunities for growth.