VICKSBURG, Miss. (May 21, 2001)-–An enterpreneur famous for taking rubber product and other businesses on the edge of bankruptcy and turning them around has sold his last remaining rubber business to a company run by his son-in-law.
Dr. Beurt SerVaas of Indianapolis sold Vicksburg-based U.S. Rubber Reclaiming Inc. April 17 to the Indianapolis private equity fund Obsidian Capital Partners LP. The purchase price was “approaching $10 million” and the assumption of certain liabilities, according to Timothy S. Durham, Mr. SerVaas' son-in-law and CEO of Obsidian.
Obsidian has somewhat the opposite mission of SerVaas in his heyday, according to Mr. Durham. “He used to do turnarounds,” he said. “We prefer to buy companies that have gone through turnaround.” Obsidian generally acquires small and mid-sized companies in basic industries such as manufacturing, distribution and services. It had no rubber interests until it purchased USRR, Mr. Durham said.
With approximately 150 employees working three shifts in a nearly 87,000-sq.-ft. plant in Vicksburg, USRR specializes in reclaiming butyl rubber from factory scrap, used inner tubes and other sources. When mixed with virgin butyl, the company said, reclaimed butyl creates a superior compound for the inner lining for tubeless tires, offering tire makers significant savings in compounding costs and enhanced processability.
The company's current capacity is 2.5 million pounds of reclaimed butyl monthly, and Durham would like to see that rise to more than 3 million, “possibly more,” he said.
“My father-in-law made some pretty significant capacity expansions in Vicksburg in the early 1990s,” he said. “We're looking to improve the machinery in place and add machinery as well.” Obsidian won't expand the actual plant in Vicksburg, he said, although he said it will probably hire new workers at USRR as the capacity expansion progresses.
SerVaas announced his plans last summer to sell USRR. He is a physician, publisher and enterpreneur who once owned 22 businesses in various fields. He entered the rubber industry in 1978 by purchasing the Indianapolis inner tube plant of Uniroyal Inc. and renaming it Indianapolis Rubber Co. He later moved its operations to Piedras Negras, Mexico, and eventually sold it to Findlay, Ohio-based Cooper Tire & Rubber Co.
Arthur Hawkins and Don LaGrone, who served as chairman and president respectively of USRR under SerVaas, will continue to do so under Obsidian.