Tecumseh Products Company Announces Agreement to Sell the Majority of Its Electrical Components Operations to Regal Beloit Corpo
03 Juli 2007 - 11:02PM
PR Newswire (US)
TECUMSEH, Mich., July 3 /PRNewswire-FirstCall/ -- Tecumseh Products
Company (Nasdaq: TECUA; TECUB) ("Tecumseh" or the "Company") today
announced that it has signed an agreement with Regal Beloit
Corporation (NYSE:RBC), to sell to Regal Beloit the majority of
Tecumseh's Electrical Components business operations for $220
million in cash, subject to customary adjustments at closing. The
operations to be sold, principally composed of the Residential
& Commercial Motors and Asia Pacific divisions of Tecumseh's
Fasco business unit, accounted for about 70% of Electrical
Components sales in 2006. Tecumseh will use the proceeds of the
transaction to pay off the debt associated with Tecumseh's second
lien credit agreement as well as a substantial portion of its
outstanding first lien debt. James J. Bonsall, Tecumseh's President
and Chief Operating Officer, said: "This is another important step
in our ongoing efforts to reduce the Company's debt, sharpen its
strategic focus, and improve its financial performance. Regal
Beloit Corporation, as a worldwide leader in electrical motion
control products, will be well positioned to further develop and
grow these businesses as part of its overall product portfolio."
Completion of the transaction, which is subject to regulatory
approval by the Federal Trade Commission and other customary
closing conditions, is currently expected to occur in the third
calendar quarter. Rothschild Inc. served as the financial advisor
to Tecumseh. About Tecumseh Products Company Tecumseh Products
Company is a full-line independent global manufacturer of hermetic
compressors for residential and commercial refrigerators, freezers,
water coolers, dehumidifiers, window air conditioning units and
residential and commercial central system air conditioners and heat
pumps; gasoline engines and power train for lawn mowers, lawn and
garden tractors, garden tillers, string trimmers, snow throwers,
industrial and agricultural applications and recreational vehicles;
and electric motors and components, including AC and DC motors,
blowers, gear motors and linear actuators for a wide variety of
industrial and consumer applications across a broad range of
industries. About Regal Beloit Corporation Regal Beloit Corporation
is a leading manufacturer of mechanical and electrical motion
control and power generation products serving markets throughout
the world. Regal Beloit has manufacturing, sales and service
facilities throughout the United States, Canada, Mexico, Europe and
Asia. CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that are subject to the safe harbor provision created by that Act.
In addition, forward-looking statements may be made orally in the
future by or on behalf of the Company. Forward-looking statements
can be identified by the use of terms such as "expects," "should,"
"may," "believes," "anticipates," "will," and other future tense
and forward-looking terminology. Readers are cautioned that actual
results may differ materially from those projected as a result of
certain risks and uncertainties, including but not limited to i)
the outcome of the judicial restructuring of our Brazilian engine
manufacturing subsidiary; ii) the success of our ongoing effort to
bring costs in line with projected production levels and product
mix; iii) our ability to reduce a substantial amount of costs in
the Engine & Power Train group associated with excess capacity;
iv) the extent of any business disruption that may result from the
restructuring and realignment of our manufacturing operations or
system implementations, the ultimate cost of those initiatives and
the amount of savings actually realized; v) the ability of the
Company to maintain adequate liquidity in total and within each
foreign operation; vi) financial market changes, including
fluctuations in interest rates and foreign currency exchange rates;
vii) availability and cost of materials, particularly commodities,
including steel, copper and aluminum, whose cost can be subject to
significant variation; viii) weather conditions affecting demand
for air conditioners, lawn and garden product, portable power
generators and snow throwers; ix) the ultimate cost of resolving
environmental and legal matters; x) changes in business conditions
and the economy in general in both foreign and domestic markets;
xi) potential political and economic factors that could adversely
affect anticipated sales and production in Brazil; xii) potential
political and economic factors that could adversely affect
anticipated sales and production in India, including potential
military conflict with neighboring countries; xiii) the effect of
terrorist activity and armed conflict; xiv) economic trend factors
such as housing starts; xv) the effect of any business disruption
caused by work stoppages initiated by organized labor unions; xvi)
emerging governmental regulations; xvii) increased or unexpected
warranty claims; xviii) actions of competitors; xix) our ability to
profitably develop, manufacture and sell both new and existing
products; and xx) the ongoing financial health of major customers.
The forward-looking statements are made only as of the date of this
report, and we undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise. Contacts: Roy Winnick or Michael
Freitag Kekst and Company 212-521-4842 or 4896 Teresa Hess
Director, Investor Relations Tecumseh Products Company 517-423-8455
Press releases and other investor information can be accessed via
the Investor Relations section of Tecumseh Products Company's
Internet web site at http://www.tecumseh.com/. Tecumseh Products
Company now offers media access to news releases via RSS. Please go
to http://tecumseh.mediaroom.com/ to sign up for our RSS feeds.
DATASOURCE: Tecumseh Products Company CONTACT: Roy Winnick, , or
Michael Freitag, , of Kekst and Company, +1-212-521-4842 or 4896;
or Teresa Hess, Director, Investor Relations of Tecumseh Products
Company, +1-517-423-8455, Web site: http://www.tecumseh.com/
http://tecumseh.mediaroom.com/ Company News On-Call:
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