EnPro Industries to Acquire Alluxa, Inc.

EnPro Industries, Inc., a leading technology company which uses materials science to push the boundaries of the semiconductor, life sciences, and other technology industries, today announced that it has entered into an agreement to acquire Alluxa, Inc., a privately held, California-based company. Alluxa is an industrial technology company that provides specialized optical filters and thin-film coatings for the most challenging applications in the industrial technology, life sciences, and semiconductor markets. The company’s products are developed through a proprietary coating process using state-of-the-art, advanced equipment.

Alluxa works in collaboration with customers across major end markets to provide customized, complex precision coating solutions through the company’s specialized technology platform and proprietary processes. The company has cultivated long-standing customer relationships across its diversified customer base. Alluxa’s global distribution capabilities support the company’s international reach, serving customers across the Americas, Europe, and Asia. Founded in 2007 and headquartered in Santa Rosa, California, Alluxa has two locations in California with a total of 76 employees.

“Alluxa is recognized as a leader in specialty optical filters and thin-film coatings technology and complements our growing advanced technology presence,” said Marvin Riley, President and Chief Executive Officer of EnPro. “The business adds to our robust expertise and expands the suite of proprietary products and services we offer to our customers. This acquisition demonstrates our commitment to investing in attractive technologies, software, and services in high-growth, high-margin markets and is consistent with our strategy, adding advanced industrial technology capabilities, compelling financial characteristics, and an experienced management team,” Mr. Riley added.

Mr. Riley continued, “We believe that we can accelerate the growth of Alluxa by leveraging EnPro’s capabilities, industry relationships as well as capital and management resources. We look forward to welcoming Alluxa employees to EnPro and working together to create value for our customers and shareholders.”

“This is the beginning of an exciting new chapter for Alluxa, and we are thrilled to join the EnPro family of companies,” said Mike Scobey, Founder, Chief Executive Officer, and Chief Technology Officer of Alluxa. “EnPro, with its extensive capital, commercial, and other resources, is the perfect partner for us as we look to materially accelerate the growth of our company in the coming years,” said Mr. Scobey.

Key Compelling Strategic Benefits

• Proprietary Technology and Processes: Alluxa’s design expertise and proprietary SIRRUS™ plasma deposition software allow the company to provide specialized filters and coatings specific to customer requirements and support the company’s ability to service customers across numerous end markets.
• Well-Positioned in the Industry: Alluxa holds a highly defensible position across end markets through the harmonization of its proprietary software, hardware, processes, and deep engineering expertise to meet challenging customer specifications and manufacture filters that competitors do not supply.
• Growth Acceleration: Alluxa is expected to grow faster than its current served markets, primarily including industrial technology, life sciences, and semiconductor markets, through 2024 and has a proven ability to pivot its sales focus to meet the demand of growing end markets.
• Supplier of Choice with Strong Customer Relationships: Alluxa has cultivated long-term relationships across its diversified customer base through its proprietary technical capabilities and customized product offering. In 2019, Alluxa was the sole source supplier to its customers on approximately one third of its sales, with a fragmented customer base of over 350 customers.
• Proven and Experienced Leadership: Alluxa’s senior management team, who will continue with the business after closing, possess an average of over 20 years of experience in the optics and high-technology fields, resulting in an intimate knowledge of the business and market, the company’s intellectual property and trade secrets, and deep industry relationships.
• Compelling Financial Profile: Alluxa has an attractive revenue and margin profile, with 17 quarters of consecutive revenue growth. By solving customers’ most difficult challenges across a wide range of rapidly growing end markets, we expect Alluxa’s track record of double-digit annual revenue growth to continue under our ownership.

Transaction Terms and Financing

Alluxa complements EnPro’s existing portfolio of businesses in the advanced technology space and fits with EnPro’s growth strategy. Building upon the 2019 acquisitions of LeanTeq and The Aseptic Group, Alluxa represents another step towards EnPro’s strategy to grow in attractive markets, technologies, and applications. The purchase price of Alluxa is $255 million, inclusive of rollover equity.

EnPro is financing the transaction primarily with available cash and rollover equity from Alluxa executives. The transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to close in the fourth quarter of 2020. EnPro will provide additional details about this transaction during EnPro’s third quarter earnings call.

GCA Advisors and Robinson, Bradshaw & Hinson, P.A. are serving as advisors to EnPro. Wells Fargo Securities and Blank Rome LLP are serving as advisors to Alluxa.

Source:  http://www.alluxa.com