EnPro Industries to acquire Alluxa for $255m

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Materials science giant EnPro Industries has entered into an agreement to acquire Alluxa, a manufacturer of optical filters and thin-film coatings, for $255 million (inclusive of rollover equity). 

According to EnPro, the purchase will bolster its existing thin-film product offering with a focus on serving the most challenging applications in high-growth markets, primarily industrial technology, life sciences, and semiconductor. 

Founded in 2007 and headquartered in Santa Rosa, California, Alluxa has two locations in California with a total of 76 employees. Its design expertise and Sirrus plasma deposition software allows the company to provide specialised filters and coatings and support its ability to service customers across numerous end markets.

In 2019, Alluxa was the sole source supplier to its customers on approximately one third of its sales, with a fragmented customer base of more than 350 customers. 

The company’s revenue and margin profile shows 17 quarters of consecutive revenue growth.

Alluxa’s global distribution capabilities support the EnPro’s international reach, serving customers across the Americas, Europe, and Asia.

‘The business adds to our robust expertise and expands the suite of proprietary products and services we offer to our customers,’ said Marvin Riley, president and CEO of EnPro. ‘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.’

Alluxa is expected to grow faster than its current served markets through to 2024, Enpro said in a press release, primarily in the industrial technology, life sciences, and semiconductor markets. It has a proven ability to pivot its sales focus to meet the demand of growing end markets, Enpro said.

Alluxa’s senior management team, who will continue with the business after closing, possess an average of more than 20 years of experience in the optics and high-technology fields.

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.

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