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EnPro (NPO) Divests Polymer Components to Edgewater Capital

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EnPro Industries, Inc. (NPO - Free Report) announced that it divested its Houston, TX-based polymer components business on Sep 3. The other party to the transaction was Edgewater Capital Partners.  The financial terms of the transaction have not been disclosed.

On Sep 3, EnPro’s shares lost 0.15%, ending the trading session at $85.92 per share.

Edgewater Capital is a private investment firm based in Cleveland, OH. It engages in acquisitions of performance material companies in multiple sectors, including specialty chemical, life science, specialty industrials and advanced materials.

Inside the Headlines

The divested business had two production facilities (both located in Texas) and one Pennsylvania-based smaller site. It generated revenues of $20 million in the first half of 2021. Before divestment, the business was part of EnPro’s Sealing Technologies segment. The segment’s revenues totaled $309 million in the first half of this year, marking a decline of 4.7% from the year-ago quarter.

The divested business will be referred to as Altamira Material Solutions under the management of Edgewater Capital.

The divestment is in sync with EnPro’s initiatives to concentrate on businesses based on materials science. The businesses feature recurring revenue streams, higher margins, healthy cash-flow-generation capabilities and advanced technologies.

In addition to the above-mentioned divestment, EnPro completed the divestment of its bushing block business to Melma Group in December 2020. EnPro also sold STEMCO’s Air Springs business to an associate of Turnspire Capital Partners in November.

EnPro divested Crewson brake adjuster and Motor Wheel brake drum businesses of the STEMCO division in September. The other party to the transaction was Hendrickson USA, LLC. In January, EnPro sold its Fairbanks Morse to private equity firm Arcline Investment Management.

Zacks Rank, Earnings Estimate and Price Trend

EnPro presently has a market capitalization of $1.8 billion and a Zacks Rank #2 (Buy). It is poised to gain from diversified businesses, solid product offerings, strengthening end markets, growth investments and a healthy balance sheet.

For 2021, the company anticipates sales of $1.075-$1.125 billion as compared with $1.05-$1.10 billion mentioned previously. Earnings per share are projected to be $5.16-$5.50, up from the previously mentioned $4.74-$5.08.

Year to date, EnPro’s shares have gained 13.8% compared with the industry’s growth of 10.4%.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

The Zacks Consensus Estimate for the company’s earnings is pegged at $5.47 for 2021 and $6.03 for 2022, reflecting growth of 10.3% and 7.7% from the respective 60-day-ago figures. The estimate for the third quarter grew 9.1% to $1.32 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 stocks in the industry are Kadant Inc. (KAI - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Dover Corporation (DOV - Free Report) . While Kadant currently sports a Zacks Rank #1 (Strong Buy), both Applied Industrial and Dover carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for the companies improved for the current year. Further, the earnings surprise for the last reported quarter was 33.11% for Kadant, 27.97% for Applied Industrial and 11.96% for Dover.

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