Fluorocarbon Co., a Laguna Niguel-based manufacturer of industrial products, has agreed to acquire the Grover Piston Ring Co. of Milwaukee and Universal Seal Co. Ltd. of Bancroft, Ontario, Canada, for $7 million cash.
Fluorocarbon President Mike Hagan said the two acquisitions will add about $8 million to Fluorocarbon's annual sales and complement the company's other sealing manufacturing activities. He would not disclose the companies' earnings.
In a two-pronged transaction, Fluorocarbon will buy out the shareholders of Grover Piston Ring, which also owns 49% of Universal Seal. The agreement calls for Fluorocarbon to purchase the remaining 51% of Universal Seal from Flemming Seyler, the company's manager.
The two acquisitions, Hagan said, are the first of several that Fluorocarbon intends to make following the company's decision to sell its semiconductor tooling business for $12 million to a group of private investors, headed by Newport Beach financier Keith Norby. The sale of the semiconductor business and the acquisitions are scheduled to close at the end of April.
Hagan said that last year Fluorocarbon's semiconductor tooling business earned about $1.1 million on $22 million in sales. Although it accounted for about one-fifth of Fluorocarbon's $5.7 million annual profits and $116 million revenues, the semiconductor division had suffered the roller-coaster ups and downs of the broader semiconductor industry, Hagan said. In contrast, he said, the companies to be acquired have shown stronger profits. He would not disclose their earnings, however.
The proposed acquisitions, Hagan said, "fit nicely into our fluid sealing group," which manufactures sealants used in the manufacturing of airplanes and off-road construction and farm equipment.