Update: Fairbanks Morse Sale Closes; Company Names New CEO

EnPro Industries said it has closed the previously announced sale of engine maker Fairbanks Morse to an affiliate of funds managed by private equity firm Arcline Investment Management for US$450 million, subject to closing date purchase price adjustments.

Fairbanks Morse also announced that George Whittier has returned to lead the company as chief executive officer, effective Jan. 27.

Whittier ran the Fairbanks Morse division from 2009-2012. Fairbanks Morse said Whittier returns to the company after successful growth-oriented leadership positions at Precision Castparts Corp., Regal Beloit Corp., and The Morey Corp. Specifically, Whittier brings a strong working knowledge of the business, extensive relationships both inside and outside of the company, and a long track record of operational excellence. Whittier has replaced Deepak Navnith, who will continue his tenure with EnPro Industries.

“I’m proud and humbled to have the opportunity to once again lead one of America’s truly great companies,” Whittier said. “Fairbanks Morse solutions and services are mission-critical in both the defense and commercial sectors. It will be my honor to work with a deeply experienced employee base to build upon our 120+ year heritage and reputation for delivering reliable and innovative power generation solutions on which our customers rely. I look forward to leading the company into this new decade and working with our amazing team to write the next chapter of the Fairbanks Morse story.”

EnPro announced the agreement to sell Fairbanks Morse on Dec. 12, 2019.

Arcline is a private equity firm with US$1.5 billion in capital. The company, based in San Francisco, California, USA, invests in niche, market-leading companies and said it approaches investments with a single vision – to identify and unlock the breakout potential in its companies. While the company said it is deliberately a generalist, some primary interest areas include industrials, technology, life sciences, and specialty chemicals.

Fairbanks Morse develops and manufactures heavy-duty, medium-speed reciprocating engines under the Fairbanks Morse and ALCO brand names, which are used primarily in marine and power generation applications. FM has been the original equipment manufacturer of its engines for over 120 years and has a large installed base for which it supplies aftermarket parts and services. FM is the principal supplier of diesel engines to the U.S. Navy, U.S. Coast Guard and Canadian Coast Guard. One hundred percent of manufacturing is conducted in its U.S. based facility in Beloit, Wisconsin, USA, while parts and services are delivered through its network of five service centers.

Earlier in 2019, Arcline signed a definitive agreement to acquire the reciprocating compression division of Baker Hughes, a GE company.

That division manufactures and services mission-critical compression and engine systems that are used in a variety of applications, including the transmission of natural gas across domestic and international pipelines. Baker Hughes is the original equipment manufacturer and supplier of parts for its systems and provides overhaul and repair services to its customers. These customers operate a large installed base of its highly respected brands, including Cooper-Bessemer, Ajax, Superior, Gemini, Enterprise, TSI, CSI, TXC, and Joy. Manufacturing is conducted in its facilities in Houston, Texas and Salina, Kansas, USA.

EnPro said it will use net proceeds from the transaction to pay down a portion of its outstanding debt while maintaining a disciplined approach to deploying capital for increased shareholder value, which could include future acquisitions and share repurchases.