MFRI sells off filtration business to focus on piping
NILES - MFRI Inc. announced it has sold it's domestic and international filtration businesses, including TDC Filter Manufacturing, Inc., Nordic Air Filtration, A/S and related assets, and plans to sell its domestic fabric filter business in Winchester, Virginia.
The moves are part of a strategic plan to refocus on its piping business, according to MFRI CEO Bradley Mautner. he
"The actions we are taking to sell our filtration business and focus all of our resources on the Perma-Pipe brand and its many future opportunities are the result of careful consideration of various strategic alternatives," Mautner said.
Among the assets sold were MFRI's TDC Filter business based in Bolingbrook. It was sold for approximately $11 million to the Industrial Air division of CLARCOR, based in Franklin, Tenn. After a short transition period, MFRI plans to sell the 100,000 square foot TDC manufacturing and office facility in Bolingbrook.
The company also sold its Nordic Air Filtration, Denmark and Nordic Air Filtration, Middle East businesses, for approximately $11 million to Hengst Holding GmbH, a specialist in filtration and filtration management and an international development partner and OEM supplier for all major automobile manufacturers.
It also signed a letter of intent to sell its domestic fabric filter business based in Winchester, VA to an unnamed private company with more than 60 manufacturing companies worldwide, The sale is expected to be completed by the end of February.
MFRI also plans to reorganize corporate staff and expenses to reflect its new strategic focus and structure, which will result in a one-time charge of $650,000 in the fourth quarter of fiscal 2015/16 and is expected to yield annualized savings of approximately $1.4 million.
The moves will allow MFRI to concentrate on its Perma-Pipe division, which manufactures factory insulated piping systems, fabrication and specialty coatings.
"In addition to paying down debt, the sale of our filtration business will give us additional resources and flexibility to fund investments in new growth opportunities such as our recently announced agreement to acquire 100 percent ownership of Bayou Perma-Pipe Canada, which we believe creates a strong platform to diversify and expand Perma-Pipe's insulation business into new markets and geographies," Mautner said.
"Managing multiple transactions to realize the best value for our shareholders is a complex task and, unfortunately, the actions announced today will result in the closing of one of our facilities," he added. "However, given
the strength of the companies purchasing these businesses and their extensive manufacturing operations, I would expect them to continue to enhance, invest in and grow the organizations and brands that have been so thoughtfully developed during the last three decades."