Investment firm Capital Southwest Corp. will spin off specialty lubricant marketer Whitmore Manufacturing and two other chemical businesses, creating a standalone company by the third quarter of 2015.
Previously an integrated company including an investment-focused unit along with several industrial and specialty chemicals companies, Capital Southwest will split into two standalone entities.
Capital Southwest will remain a business development company, while its three manufacturing companies – Whitmore, Jet-Lube and RectorSeal – will be wrapped into one company.
Shortly after joining CSWC, I concluded that we were operating two distinct business models – an industrial growth company and an equity investment company – within a corporate and regulatory structure that is ideal for neither, resulting in our stock trading at a significant discount to [our value], Joseph B. Armes, chairman and CEO of Capital Southwest, said in a press release issued yesterday.
Whitmore Manufacturing is a specialty lubricants business based in Rockwall, Texas. Some of Whitmores portfolio includes lubes, greases, gear oils and hydraulic fluids for intensive surface mining, railroad and industrial applications. The company also provides equipment such as rail trackside applicators and specialty products such as wire rope lubricants, anti-seize compounds, friction modifiers and lubricants for the food industry.
According to Capital Southwest, Whitmores revenue for its 2014 fiscal year was $57.8 million, up 19 percent from $48.5 million in 2013.
Jet-Lube specializes in anti-seize compounds, and specialty lubricants and greases for food grade, industrial and marine applications. The company has branches in Houston, Edmonton, Canada, and Berkshire, England. Its 2014 revenue was $51.1 million, up from $48 million the year before.
The spin-off will also include RectorSeal, a Houston-based supplier of specialty chemicals and control devices for plumbing, electrical and other industrial applications.