EnPro Industries recently entered into a definitive agreement to sell its STEMCO Air Springs business unit, which manufactures Goodyear-licensed air springs, to an affiliate of private equity firm Turnspire Capital Partners.
The agreement, which includes STEMCO’s Super Cushion and Spring Ride air springs, provides for the sale of the air springs business for $32.0 million in cash and a long-term promissory note with a face value of $7.5 million that will be stated at fair value, the companies said.
The purchase price is subject to adjustment based on the amount of cash and working capital on the closing date.
“The sale of STEMCO’s air springs business marks a significant milestone in our portfolio reshaping effort within STEMCO and significantly reduces EnPro’s exposure to the commercial vehicle and heavy-duty truck markets,” said Marvin Riley, EnPro’s president and chief executive officer. “Over the past year, we have conducted an extensive review of our portfolio of companies to identify businesses and product lines that are no longer aligned with our long-term objectives. Based on this work, we have exited several product lines and divested several businesses to reduce our heavy-duty truck exposure.
“We are pleased to share that we expect to complete this transaction as well as the other announced exits in line with the year-end 2020 timeline that we previously communicated.”
The sale is expected to close in the third quarter of 2020, and is subject to antitrust approvals and typical closing conditions, EnPro said.
“While we will miss our colleagues at Air Springs, we are confident that Turnspire Capital Partners will be a strong owner of Air Springs and provide the focus needed to take the business to the next level,” Riley added. “On behalf of the entire EnPro organization, I want to express our great appreciation for the many contributions that the Air Springs management team and employees have made to EnPro. We would also like to extend our appreciation to the Turnspire team for being an excellent partner throughout the sale process, as they exhibited commitment, speed, and certainty.”
STEMCO’s air springs are manufactured under a global and exclusive license from The Goodyear Tire and Rubber Company in Fairlawn OH. Upon closing of this transaction, an affiliate of Turnspire will acquire all the assets of STEMCO's Goodyear Air Springs business, including full brand licensing rights, technical and R&D center in Fairlawn, all manufacturing facilities, all intellectual property, all real estate in the US and Mexico, and all personnel.
“We look forward to continuing the Goodyear Air Springs legacy as an independent company by leveraging an extensive product portfolio and bringing innovative technology solutions to leading OEM partners and aftermarket customers,” said Abel S. Osorio, Turnspire partner. “Turnspire will build on the foundation of its legendary brand name, unparalleled reputation for quality, best-in-class reliability, and superior service.
“Our agreement to acquire Goodyear Air Springs is the culmination of a highly integrated diligence process in which we utilized Turnspire’s extensive experience executing corporate carve-outs, and knowledge of the transportation and manufacturing industries, to deliver speed and certainty to EnPro.”
Turnspire said it looks forward to partnering with the Goodyear Air Springs management team to solidify itself as a leader in the air springs category by deploying Turnspire’s operational capabilities and investment in equipment, people, and processes. David Brinkman, Goodyear Air Springs’ general manager for EnPro, will continue to lead the business as CEO under Turnspire’s ownership.
“Turnspire is an excellent fit for our people and technology,” Brinkman said. “The team’s highly relevant experience, commitment to operational excellence and significant financial and strategic resources will enable Goodyear Air Springs to accelerate its growth and invest in technology that benefits our customers.
“We look forward to working with Turnspire to build on our established reputation in the industry for the best quality, innovation and service.”