Generational Equity Managing Director Cory Strickland said TRG saw value in adding MS Rubber to its organization because of available capital it has and the potential for increased revenues and markets, as the Mississippi-based firm expands its line of products and services. He added that the deal expands TRG's geographic footprint into the U.S. Southeast.
Strickland said with its offerings, MS Rubber essentially functions as a service-based organization, an advantage in the current market.
"This is the perfect time for service-based companies to be acquired because many of them are extremely busy and (financially) healthy," Strickland said. This is partially due to the backlog of product and service needs that the industry still is catching up on from the COVID pandemic.
Strickland added that M&A activity within the rubber industry has been robust since COVID, especially since businesses have gotten back to work following short-term closures. The low availability of new and/or experienced labor has allowed many companies like MS Rubber to maintain their experienced group of employees, while inflation has helped boost prices. This in turn has helped businesses like MS Rubber increase profitability despite the recent inflation woes.
While MS Rubber has become a part of TRG, it will be run autonomously from its Mississippi location, Strickland said. MS Rubber currently employs about 25, and all are expected to remain with the parent company. The business will continue to be run by MS Rubber President Sandy Hebert Lewis and Vice President Rhonda Hebert Fleming, who are part of a multi-generational family ownership structure.
"I imagine most customers won't see any real differences in either the products and services they receive or the (MS Rubber staff) they work with and have come to know," Strickland said. If anything, customers will have access to additional services through the TRG operation.
One of the benefits of the deal for MS Rubber is that it will have capital to afford significant equipment upgrades and other investments that will further improve the quality and level of service for its customers, Strickland said.
TRG now will employ over 100 total. It has experienced double-digit growth each of the last two years and grew steadily in the year leading up to 2020 when the pandemic arrived. Much of TRG's business is in pulp and paper, and the parent company employs experienced professionals in sales, marketing, finance and other back-end office roles to help further support MS Rubber's growth within the sector, Strickland said.
He added that MS Rubber had "multiple" parties willing to purchase the business in what Strickland describes as an "active period in transactional deals." Once TRG was identified as a serious partner, the transaction details were quickly finalized.
"This was one of those rare instances where the perfect seller and the perfect buyer came together at the same time," Strickland said. "MS Rubber was run by (siblings) who were ready to exit the family's industrial supply business. Along came TRG, who is also in the industrial supply business and wanting to expand, and we made a deal.
"It is great to know that we have found the perfect fit to take MS Rubber into the future and to carry on the family's legacy."
