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EnPro (NPO) Divests STEMCO Air Springs to Turnspire Capital

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EnPro Industries, Inc. (NPO - Free Report) completed the divestment of its STEMCO Air Springs business to an associate of Turnspire Capital Partners. The divestment was valued at $39.5 million.

Notably, the sale agreement was communicated by EnPro in August 2020.
In the past two days, EnPro’s shares have gained 6.4%, ending the trading session at $72.96 yesterday.

Turnspire Capital Partners is a New York-based private investment firm. Its special solutions are intended on adding new lives to consumer and industrial manufacturing companies, especially in North America.

Inside the Headlines

As noted, the divested business includes STEMCO’s Spring Ride and Super Cushion air springs, and Goodyear-licensed air springs. STEMCO, in turn, is a division under EnPro’s Sealing Products segment.

In lieu of these businesses, EnPro received $25 million in cash and $7.5 million worth of promissory notes. Also, the retention of accounts receivable added $7 million to the divestment value.

The divestment is in sync with EnPro’s initiatives to restructure its portfolio, especially to lower the exposure to the heavy-duty truck and commercial vehicle markets. Further, concentrating on businesses based on materials science — featuring recurring revenue streams, higher margins, healthy cash flow generation capabilities, and advanced technologies — will now be easier for EnPro.

In addition to the above-mentioned divestment, EnPro completed the divestment of Crewson brake adjuster and Motor Wheel brake drum businesses of the STEMCO division this September. The other party to the transaction was Hendrickson USA, LLC.

Zacks Rank, Earnings Estimate and Price Trend

With a market capitalization of $1.5 billion, EnPro currently sports a Zacks Rank #1 (Strong Buy). The company is poised to benefit from its portfolio-restructuring efforts and cost-saving actions. However, end-market challenges caused by the pandemic might be concerning.

In the past three months, EnPro’s shares have gained 20.9% compared with the industry’s growth of 14.2%.




 

The Zacks Consensus Estimate for the company’s earnings is pegged at $2.23 for 2020 and $2.73 for 2021, reflecting growth of 38.5% and 23.5% from the respective 30-day-ago figures. Also, the estimate for the fourth quarter increased 90% to 57 cents during the same timeframe.

EnPro Industries Price and Consensus

 

EnPro Industries Price and Consensus

EnPro Industries price-consensus-chart | EnPro Industries Quote

Other Stocks to Consider

Some other top-ranked companies in the same industry are Altra Industrial Motion Corp. (AIMC - Free Report) , Dover Corporation (DOV - Free Report) and Graco Inc. (GGG - Free Report) . While Altra Industrial currently sports a Zacks Rank #1, both Dover and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, earnings estimates for Altra Industrial improved for the current year, while have been stable for Dover and Graco. Further, earnings surprise for the last reported quarter was 77.55% for Altra Industrial, 22.14% for Dover and 40.48% for Graco.

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