Trelleborg to buy KKR's Minnesota Rubber and Plastics in $1 bln deal (updated)
02/08/2022 15:52
(Recasts with announcement)
By Chibuike Oguh
NEW YORK, Aug 2 (Reuters) - Swedish engineering firm
Trelleborg AB TRELb.ST has agreed to acquire Minnesota Rubber
and Plastics from private equity firm KKR & Co Inc KKR.N for
about $1 billion in cash, the companies said in a statement on
Tuesday.
The deal, which was first reported by Reuters, is expected
to expand Trelleborg's polymer and plastics business in North
America when it closes before the end of this year.
KKR acquired Minneapolis-based Minnesota Rubber and Plastics
from private equity firm Norwest Equity Partners for an
undisclosed amount in 2018.
KKR stands to make more than three times its original
investment on the deal, a person familiar with the matter said.
Minnesota Rubber and Plastics was founded in 1941 and
produces high-grade plastic components used in cars, medical
devices and telecommunications equipment, with manufacturing
facilities in North America, Europe and Asia.
About 1,300 rank-and-file employees of Minnesota Rubber and
Plastics, who are not part of management, are set to receive on
average up to a year's worth of their annual salaries when the
deal closes, Josh Weisenbeck, head of industrials at KKR, said
in an interview.
The employees will be paid this money to sell their stakes
in the company to Trelleborg. This is because Minnesota Rubber
and Plastics is part of KKR's employee-stock ownership program,
which gives workers at its portfolio companies equity in
addition to paying them a wage.
"This not only helps employees, it's good for companies,
shareholders, investors and communities," Weisenbeck said.
Minnesota Rubber and Plastics has acquired several smaller
rivals under KKR's ownership. It bought Britain's Primasil
Silicones in May and Pawling Engineered Products Inc, a Pawling,
New York-based plastics firm, in 2021.
Stockholm-listed Trelleborg is a provider of high-end
plastics and polymer used by companies across oil and gas,
aviation and construction. It has a market capitalization of
about $6 billion.
The acquisition comes as Trelleborg shares trade close to an
all-time high. The company clinched a deal earlier this year to
sell its division that makes tyres for agricultural and
industrial machinery to Yokohama Rubber Co 5101.T for 265.2
billion yen ($2.18 billion), giving it capital for acquisitions
and share buybacks. urn:newsml:reuters.com:*:nL2N2VS0FA
(Reporting by Chibuike Oguh in New York
Editing by Rashmi Aich and Mark Potter)
((Chibuike.Oguh@thomsonreuters.com; +332-219-1834; Reuters
Messaging: chibuike.oguh.thomsonreuters.com@reuters.net))