GREENSBORO,N.C.—The culmination of a six-month process by CGR Products to acquire EG Gasket & Supply is a perfect fit for both sides, according to executives from the two companies.
The ownership change, completed Oct. 31, will increase CGR Products' revenue by nearly $8 million to about $29 million during the next fiscal year, according to CGR Products President Chuck Keeley. The Greensboro, N.C.-based manufacturer and fabricator of a wide range of flexible parts also added nearly 30 employees to its business from EG Gasket, located in Waukesha,Wis.
Financial details of the purchase weren't disclosed.
EG Gasket's plant will remain open. Besides a factory inGreensboro, CGR Products operates a facility in Decatur, Ala.
"We kept every single employee except for (owner) Doug Ginter, who is retired by his own wishes and spending more time with his family," Keeley said. "It's a wonderful deal for both companies."
The combined company will employ more than 110 in three states, expanding the capabilities of CGR Products to meet the demands of customers who require precision products and quick turnaround times.
CGR Products manufactures a wide variety of products made of rubber, polyurethane, cork, metal, fiber and other materials, used in riding mowers, compressors, small engines, automobiles and other applications. With capabilities in custom molding, die-cutting, skiving and laminating, the firm counts major heavy duty truck and equipment manufacturers, such as Caterpillar, among its customers. It works directly with nearly 35 boat manufacturers, Keeley said.
"We're fortunate to have a very diverse and broad customer base," he said.
The selling cycle for most of its products averages between nine and 18 months.
"We are optimistic that we can leverage the local manufacturing capabilities with our established sales presence in the area into a nice growth opportunity moving forward," Keeley said.
CGR Products decided 3½ years ago to grow not only organically but by possible acquisition. The timing was right financially for CGR Products, but many candidates for purchase didn't want to sell until their bottom-line results improved.
CGR Products decided its targets should be companies in the Southwest and the Midwest, Keeley said. Eventually the manufacturer began working more closely with a rep group in Milwaukee that made an introduction of EG Gasket as a possible target.
"The Ginter family has proudly operated EG Gasket in the Milwaukee area for 62 years. I am extremely pleased and excited to have our company acquired by CGR Products of North Carolina," Ginter said. "CGR has experience with acquisitions as well as an established sales presence and numerous customers in Wisconsin. They are the ideal buyer for EG Gasket's employees, customers and suppliers. I know they will serve each constituency well in the future."
EG Gasket, founded in 1950, earned its reputation as a reliable manufacturer of gasket and sealing products for many markets, including small engine, heavy equipment, power transmission and power generation, Ginter said.
The benefits of adding a location in the Midwest were very appealing to the leadership, Keeley said.
"Location does mean something in our business," he said. "Gaskets are an inexpensive part of the final assembly of a product so local presence is very important, and having a location in the Midwest really matters."
Keeley said EG Gasket's 30 employees bring capabilities and a customer base that CGR Products did not have previously, particularly in goods with high-temperature engine applications.
"They also have employees that know a lot about this industry and with engine sealing applications in general," he said.
CGR Products isn't finished looking for new partners, Keeley said. The company was close to acquiring two other companies during a recent two-month period, and meetings are in the works to consider other acquisition possibilities.