Charlotte-based NN Inc. (NASDAQ: NNBR), a global diversified industrial company that engineers and manufactures high-precision components and assemblies, announced it has entered into a definitive agreement to sell its lone plastics products plant. The Lubbock, Texas, plant known as Industrial Molding will be sold to Chesterfield, Michigan-based Davalor Mold Co., a wholly owned portfolio company of Grand Rapids, Michigan-based Blackford Capital.
Total net cash proceeds will be approximately $16 million. The plastics plant does not fit with NN’s future strategies and its sale will improve company finances, says NN CEO Harold Bevis, in a release.
“NN is underway with a strategic transformation that includes leveraging our core competencies and implementing a supportive balance sheet” says Bevis. “IMC is a good, stand-alone plastics injection-molding plant and is not core to our strategic direction. Our core competencies are centered upon delivering globally competitive, mission critical manufacturing solutions to discriminating buyers of high-value, high-precision components and sub-assemblies. This plant is not consistent with this direction and is more general-purpose in nature.
“Furthermore, the products and customers in this plant are unique to it and there will be no impact to NN’s remaining business. The plant’s business is centered in generic vehicle parts and ball bearing components.”
The sale will allow NN to “progressively correct our balance sheet back to market norms. We will pay down debt with the net proceeds from this transaction and continue to advance our balance sheet initiatives,” says Bevis. “The company plans to “focus and refine our business plans in our chosen markets of auto, electrical, industrial and medical.”
As of Dec. 31, NN employed about 3,000 workers, including almost 1,800 in the U.S. It has 27 facilities it either owns or leases in a total of six countries, according to its annual report. Only its corporate headquarters are in Charlotte.
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