ENID, OK - Astec Industries, Inc. announced that it intends to sell its GEFCO, Inc. subsidiary, located in Enid, Oklahoma. GEFCO produces drilling equipment and related products. Its products cater to different industries including water well, environmental, groundwater monitoring, construction, mining, and oil and gas exploration. The move will help in simplifying their organizational structure and will strengthen their financial position. It will also enable their company to focus on core higher margin businesses.
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“As part of a thorough strategic review of our product portfolio, we determined that divestiture of GEFCO enhances shareholder value and aligns with our vision for the future of Astec Industries,” stated Barry Ruffalo, CEO of Astec Industries, Inc. “We are in the process of finding a buyer for GEFCO’s businesses. The transaction will further our strategy to simplify the organization, strengthen our financial position and release additional capital to deploy toward future growth opportunities. While the transaction is expected to enhance shareholder value, we remain mindful of the approximately 150 GEFCO employees that may be affected by the divestiture.”
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GEFCO was acquired by Astec in 2011 and is currently one of the six business units in Astec’s Energy Group. GEFCO has contributed approximately $50 million to their annualized revenues. Management hopes to close a deal by mid-2020.
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Vince Trotta, President of GEFCO stated, “We would like to thank our employees for their dedication over the years and want to provide as much advanced notice as possible. We have enjoyed our relationship with Astec Industries and look forward to the possibility of becoming part of an organization that more broadly participates and invests in the markets we serve. We hope such a buyer would retain our employees for its operations. In the event that is not the case, we will assist with job searches, unemployment registration, and other benefits.”
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Astec has seen lower demand for equipment and parts in all of its segments, particularly in domestic markets. 80% of Astec’s sales are generated from domestic markets which caused the concern.
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Astec Industries to sell GEFCO
