EnPro Buys Fabrico and Sells GRT business, Shares Up 1.1% - Analyst Blog

EnPro Industries Inc. (NPO), abiding by its portfolio realignment policy, recently announced the acquisition of Fabrico, Inc. and sale of its GRT business unit. The twin transactions have boosted investors' sentiments, sending the share price up by 1.13% on Dec 22.

Per terms of the acquisition agreement, EnPro Industries purchased Fabrico, Inc. from Fabrico Holding Company LLC, an affiliate of Prudential Capital Partners III, L.P. The disbursement was made fully in cash. Fabrico offers high quality engineered products and solutions to the land-based turbine (“LBT”) industry. Integrated with EnPro's Technetics Group, it will enable quick penetration in the industry.

Besides the acquisition, EnPro Industries sold off its GRT business unit to GRT Rubber Technologies, LLC for a cash consideration of $44 million. The latter manufactures and sells conveyor belts and sheet rubber for a diversified customer base in various end markets.

Both the transactions are expected to work in the best interests of EnPro Industries. While the acquisition will enhance the company's business opportunities, the asset disposition will free up resources that can be further utilized for core business expansion.

Back in Mar 2014, EnPro Industries, through its subsidiary Stemco LP, had acquired the remaining interest in Stemco Crewson LLC joint venture from Tramec, LLC for an undisclosed amount.    

The Zacks Consensus Estimate for EnPro Industries is pegged at $2.35 for 2014 and $2.93 for 2015, representing year-over-year decline of 1.9% and growth of 25.2%, respectively.

With a market capitalization of $1.5 billion, EnPro Industries currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry include Blount International Inc. (BLT), Middleby Corp. (MIDD) and Sun Hydraulics Corp. (SNHY). All these stocks sport a Zacks Rank #1 (Strong Buy).

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