NORTH CANTON, Ohio—Carlstar L.L.C. plans to exit the belt sector after its parent company, private equity firm American Industrial Partners, reached an agreement to sell its belting operation to Timken Co.
Timken said it will pay $220 million for the business, which reported sales of about $140 million for the 12 months that ended June 30. The transaction is expected to close in the third quarter and is subject to customary government and regulatory approvals.
“Acquiring the Carlstar belts business expands our offering in existing and complementary end markets and broadens our ability to bring customers a diverse package of premium mechanical power transmission products and services,” Timken CEO Richard G. Kyle said in an Aug. 3 news release.
Carlstar produces belts under the Carlisle, Ultimax and Panther brands using a variety of materials, including EPDM rubber. Timken's release said the transaction includes belts for industrial, commercial and consumer applications. The unit employs about 750 and is headquartered in Springfield, Mo.
The operation consists of two manufacturing facilities—in Springfield and in Fort Scott, Kan.
“While the decision to sell our belts business was not an easy one, its product portfolio is an excellent strategic fit for Timken,” Carlstar CEO John Salvatore said in a statement. “The divestiture will allow Carlstar to focus on growing our core Tire & Wheel business and remain committed to providing our customers world class products, service and support.”
A Timken spokeswoman said Carlstar's belts will allow the firm to create additional customer value by offering a more complete package of power transmission parts and services around the bearing, which is the firm's key product line.
Timken, headquartered in North Canton, employs 14,000 with operations in 28 countries and posted 2014 sales of $3.1 billion. The firm focuses on bearings, specifically tapered roller bearings, but it also has added gearboxes, chain, couplings, lubrication systems and a variety of industrial services.
“We do consider the team at Carlstar to be operationally strong, and we're looking forward to having them join Timken,” the spokeswoman said.
“We see this as a very good fit for our company,” she said. “Carlstar serves many of the same end markets that we do. It's a company that has a longstanding customer relationship like Timken does. Carlstar has deep technical expertise and unique offering capabilities. All of those qualities are very much a fit for Timken.”
Carlstar already is focused on growing its Tire & Wheel business through strategic acquisitions. In July, the firm acquired Marathon Industries Inc., a supplier of solid polyurethane tires, flat-free tires and pneumatic tires for small industrial uses. Financial terms were not disclosed.
Marathon's lawn and garden tires and accessories complement Carlstar's offerings and supports the construction, industrial and material handling markets.
“The focus is going to be on our core business, which has been the specialty tires and wheels,” a Carlstar spokeswoman said. She added that future acquisitions within the tire and wheel industry are not out of the question, but nothing is in the works at the moment.
The divestiture of its belting unit marks another major transition point for Carlstar, which was Carlisle Companies Inc.'s Transportation Products business before AIP purchased the unit in late 2013 for $375 million, a transaction that closed in 2014. Since that time, the firm rebranded itself and selected Salvatore as its CEO, replacing Kevin Forster.
Carlstar employs more than 3,300 and has 21 facilities in five countries.