CHARLOTTE — NN, Inc., a Charlotte-based industrial manufacturing company, will sell its life sciences division to affiliates of American Securities LLC for $825 million, the firm announced Monday.

NN expects the deal to be completed in the fourth quarter of 2020. The transaction will include $755 cash payable at the deal’s close, along with a $70 million earnout in cash based on the life sciences division’s performance.

American Securities is a private equity firm based in New York. Following the purchase, the company will combine the life sciences division with MW Industries, its portfolio company that manufactures springs and fasteners.

In early August, NN reported an earnings loss in the second quarter as the COVID-19 pandemic drove down demand. In the life sciences segment, the company’s income from operation for the second quarter was $4.3 million on a GAAP basis, compared to $9.3 million a year earlier.

The company will use the roughly $700 in proceeds from selling the life sciences division to further pay down debt and strengthen its balance sheet, according to the press release.

“This is a pivotal moment for NN as the sale of Life Sciences provides us with a clear, expedient and certain path to obtain the necessary capital to significantly reduce our debt and continue to execute on our Power Solutions and Mobile Solutions businesses where we see strong potential to grow and generate value for our shareholders,” CEO Warren Veltman said in a statement.

The company will continue to pursue markets including electric vehicles, aerospace and defense, Veltman added. The company expects to have a growth trajectory of about $600 million in annual sales over the next five years.

Shares of NN (NNBR) were trading near $6.81 on Monday, up 87 cents.

The release is available here.

This story is from the North Carolina Business News Wire, a service of UNC-Chapel Hill’s School of Media and Journalism