Deal Valued at About $31 Million : Wynn’s Completes Buy of Rubber Firm

Wynn’s International Inc. Friday said it completed the purchase of Precision Rubber Products Corp., a Lebanon, Tenn.-based rubber-molding company, in a deal valued at about $31 million.

Terms of agreement call for the Fullerton-based supplier of automotive parts, accessories and petrochemicals to pay $26 million in cash and assume a tax liability from Precision Rubber of approximately $3 million. Wynn’s will also issue up to 70,000 shares of its stock as part of the agreement.

Precision Rubber manufactures O rings and other seals for the automotive, aerospace and hydraulic industries. Its customers include General Motors, Ford and Chrysler and the Cummins Engine Co., which makes diesel engines.

The privately held company owns seven factories in the United States and one in Canada. As part of the purchase agreement, Wynn’s also obtained the company’s three subsidiaries, including holdings in the United Kingdom and Canada.

Stock Agreement

James Carroll, Precision Rubber’s president, reached a five-year employment agreement with Wynn’s. John Lillicrop, Wynn’s president said his company agreed to issue up to 70,000 shares of its common stock to Carroll if Precision Rubber doubles its earnings by the end of 1990.

Although the company has up to five years to double its earnings, how soon Carroll receives the stock “depends on how fast” Precision Rubber meets the targeted earnings level, Lillicrop said.

Overall, Wynn’s plans to double its annual sales to $500 million by the close of 1990. As previously reported, the company earned $3.1 million on revenues of $172.1 million, down 62.7% from the previous year when earnings were $8.3 million on revenues of $165.5 million. During the 12 months ended April 30, Precision Rubber earned $4.6 million on revenues of $52 million.