Trelleborg completes acquisition of Minnesota Rubber and Plastics

FORT WAYNE, Ind.—Trelleborg A.B. has finalized the $950 million purchase of Minnesota Rubber and Plastics, an acquisition that was announced in early August.

If a tax asset (on the Swedish side, where Trelleborg is based) of approximately $90 million is factored in, the purchase price amounts to approximately $860 million, according to Trelleborg.

"This is a step change for Trelleborg Sealing Solutions," Peter Nilsson, president and CEO of Trelleborg Group, said in an Oct. 28 news release. "The business area will be as strong in North America as its already established position in Europe."

Plymouth, Minn.-based MRP, a manufacturer of rubber, thermoplastic and polymer products, had been owned by the world's third-largest private equity firm, KKR, which has offices in New York City.

The transaction was finalized between Trelleborg and an affiliate of KKR Oct. 27.

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"I am incredibly proud of the entire MRP team's accomplishments throughout our time together," said Josh Weisenbeck, a partner at KKR. "With Trelleborg, MRP will continue to have an employee-centric culture, and we are looking forward to seeing their many successes to come."

Nilsson said earlier this year that the acquisition will allow Trelleborg to expand its North American footprint in several business areas, including specialty industrial, medical, food and beverage, and water-related infrastructure components—MRP's areas of expertise.

He noted that MRP "complements and strengthens" Trelleborg, admitting in August when the deal was announced that it was "missing some of the rubber side" in the U.S.

Trelleborg has 21,800 employees globally and saw sales of $3.3 billion in 2021. MRP had sales of about $262.2 million in 2021, according to Trelleborg.

MRP historically has grown organically (with some acquisitions) at between 8 and 10 percent per year, and sees its largest sales in North America, followed by Asia and Europe.

MRP has its headquarters and innovation center outside of Minneapolis and a total of eight manufacturing facilities globally, four of which are in the U.S. and the remainder of which are in Mexico, England, the Czech Republic and China.

By market segment, MRP sees its highest revenues in specialty industrial products, followed by medical, food and beverage (the segment with the highest growth) and finally automotive, according to Trelleborg.

The acquisition of MRP was made possible by a bridge loan that runs until the settlement for Trelleborg Wheel Systems is obtained.

Trelleborg announced the proposed sale of its wheel systems segment to Yokohama Rubber Co. Ltd. in March for $2.3 billion.

MRP employees receive cash payouts

All 1,450 MRP employees—including hourly manufacturing production, technical and administrative employees—across six countries will receive "substantial cash payouts" for the ownership in the company.

KKR in 2018 implemented an employee ownership program at MRP, whereby employees were given ownership interests in the company.

With the transaction now closed, employees will receive cash payouts worth between three and 24 months of their annual salary.

Amounts will vary based on tenure and employment status.

As part of the acquisition, employees also will receive pre-paid personal financial coaching and tax preparation services, according to a KKR spokesperson.

KKR introduced the employee ownership program for MRP employees as a free, incremental benefit and not in exchange for benefits, wages or wage increases.

Aside from this program, known as Ownership Works, KKR's investments in MRP helped drive acquisitions and funded a new innovation center.