ENID, Okla. — Astec Industries, parent company of GEFCO, has announced plans to sell the Enid-based subsidiary.
According to a Monday press release, Astec, based in Chattanooga, Tenn., plans to divest itself of GEFCO, with the transaction expected to conclude by June 2020.
The company, which produces drilling rigs and related equipment for the oil and gas, mining, water well and geothermal industries, was founded in 1931 in Enid as George E. Failing Co. Astec Industries Inc. acquired GEFCO and its product lines in 2011. In 2015, Astec shuttered a production facility in Loudon, Tenn., that employed about 75 employees, and moved its production to Enid.
Following the change in ownership in 2011, Astec undertook an upgrade investment of approximately $10 million at its newly acquired Enid facilities.
GEFCO businesses contributed approximately $50 million in annualized revenue, according to the Astec press release, but divesting GEFCO is expected to "eliminate related annual operating losses" and increase the company's earnings per share.
“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,” Astec Industries CEO Barry Ruffalo said in the announcement. “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.”
Vince Trotta, president of GEFCO, said the company wants to work with GEFCO employees through the transition period.
“We would like to thank our employees for their dedication over the years and want to provide as much advanced notice as possible," Trotta said in the press release. "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.”
Trotta told the News & Eagle Tuesday this is the fifth time GEFCO has been up for sale in 80 years. For now, while Astec looks for a buyer for GEFCO, Trotta said employees and the community should expect work to continue as usual.
"We’re focused on our customers and our employees," Trotta said. "'Business as usual' is the headline for us."