CHARLOTTE, N.C.—EnPro Industries Inc. got what it wanted, while ContiTech A.G. did what it had to do.
In a bold and surprising move aimed at significantly bolstering and expanding its Stemco division, EnPro has agreed to purchase Veyance Technologies Inc.'s North American air springs business from ContiTech, a division of Continental A.G., in a cash transaction.
ContiTech, which acquired Fairlawn, Ohio-based Veyance in January, did not want to sell the air springs operation, company officials said when it purchased Veyance, because it was a valuable piece of the business with solid growth potential.
But it had no choice, as U.S., Mexican and Brazilian antitrust authorities mandated it do so in order to close the Veyance transaction.
Financial details on the sale of the Veyance air springs business were not disclosed. The transaction, which needs approval of antitrust authorities in North America, is expected to close in July, an EnPro spokesman said.
Noting that the acquisition is a unique opportunity for both companies, Jon Cocco, who heads the air springs operation for Veyance, said “EnPro has a proven track record of investing in both people and businesses, which is a great recipe for future success.”
Once the deal is finalized, the air springs business will be moved into the Stemco operation, which is part of Charlotte-headquartered EnPro's Sealing Products segment.
Included in the transaction are a research and development facility in Fairlawn and a production plant in San Luis Potosi, Mexico, where the air springs are manufactured, according to Stemco President Todd Anderson.
About 500 are employed at the Mexican factory and another 30 commercial and R&D employees are located at the Fairlawn site or at a Canadian office.
“The deal will also bring the existing air springs manufacturing, design and support teams onto the Stemco staff,” Anderson said in a letter to customers.
He said the air springs business “carries with it premium product performance. Customers will be able to count on the same consistent product performance and brand attributes, as the products will continue to be manufactured in the same facility and engineered by the same design team with the same support functions, in addition to gaining the support of the entire Stemco team.”