BROOKVILLE, Ind.—Salt Creek Capital has acquired rubber components maker Sperry & Rice for an undisclosed amount, the private equity firm said in a news release.
Sperry & Rice produces specialized parts made from rubber and plastic compounds for the appliance, automotive, and heavy truck and bus industries. The company is headquartered in Brookville and has another manufacturing operation in Killbuck, Ohio.
The firm's product portfolio consists of seals, hoses, tubing and straps, in several key niches. It focuses mainly on extrusion, though it does a little injection molding when it joins parts together. The Ohio facility also does some mandrel hose formations, while the Indiana plant is focused solely on extruded tubing using a range of rubber compounds, excluding silicone.
Randy Dobbs will serve as Sperry & Rice's new CEO. He replaces James Gregory, who was the former owner. The release said Gregory intends to retire and had led the firm for the last 12 years. He said in a statement that he is confident Sperry & Rice will continue to thrive under Dobbs' leadership.
Dobbs confirmed that Gregory's co-owner, Chief Financial Officer Tom Sander, also is retiring. The remaining 120 employees will transfer with the business.
Historically, Dobbs said Sperry & Rice's annual sales have approached $20 million.
“Jim and his team built a well-established business, and we are delighted to carry on his legacy in the company's next chapter,” Dan Phelps, Salt Creek's managing director, said in a statement.
Dobbs comes to Sperry & Rice after spending more than a decade with Ludlow Composites, He and the majority owner of that firm sold the company in 2014. Dobbs then joined Salt Creek as an executive partner looking to acquire a new firm. Gregory, however, brought Dobbs on in July 2015 to help run the day-to-day operations of Sperry & Rice.
When Gregory approached Dobbs about taking over so he could retire, Dobbs brought in Salt Creek, and the deal materialized. “The fact that Jim wanted to get out and retire was a great opportunity for me to continue on and capitalize on what he started,” Dobbs said.
Since 2008, Dobbs said Sperry & Rice hasn't had a staff member to focus solely on selling, which is why in February he brought in Warwick Johnston as Sperry & Rice's national sales manager. Johnston was tasked with focusing on maintaining and growing the firm's customer base, with an eye toward the converting and fabricating side of the industry.
Dobbs said the firm is targeting the glass/window side of the architectural market and the consumer products industry as two areas Sperry & Rice's technology could have some applications in. He added that the firm will look to serve overseas markets in the future. Right now its sales mostly are focused in North America, with one Chinese customer.
Salt Creek Capital is a San Francisco-based private equity firm that aims to partner with experienced operating executives to acquire profitable companies with up to $100 million in revenue. The firm said it takes a long-term approach to investing in lower middle market businesses.
Sperry & Rice was founded in the 1940s and then brought together under Alco Industries. Gregory ran the Brookville facility—then known as Sperry Rubber & Plastics—from 1997-04, when he and Sander acquired it and the Killbuck facility—which operated as Rice Chadwick Rubber Co.—from the holding company to form Sperry & Rice.