Technitrol Completes Acquisition of ERA GroupPHILADELPHIA--Jan. 4, 2006--Technitrol, Inc., has announced it has completed the acquisition of ERA Group, a producer of electronic coils and transformers primarily for the European automotive market. The purchase price was approximately EUR 49 million, or $58 million (as of Tuesday, January 3, 2006). The acquisition was financed primarily with bank credit under Technitrol's multi-currency credit facility.
ERA is based in Herrenberg, Germany and has production operations in Germany, Tunisia and China. Its product lines include advanced-technology ignition coils, along with a variety of other coils and transformers used in automotive, heating/ventilation/air conditioning and appliance applications. Known for extensive engineering capabilities, ERA recently developed a patented ionization-sensing ignition coil module that communicates with engine control units to tailor combustion spark duration to specific driving conditions, such as idling, accelerating and decelerating, thus maximizing engine power while minimizing harmful exhaust emissions.
The business will be the cornerstone of a newly formed automotive products division at Technitrol's Pulse electronic components unit. In the 12 months ending December 31, 2006, Technitrol expects ERA to generate revenues of approximately $90 million and incremental earnings per diluted share of $0.08 to $0.10. By the end of 2007, Pulse expects to have fully completed the integration of ERA operations, resulting in annual net savings in cost of goods sold and operating expenses ramping to more than $8 million in 2008.
"Advanced automotive technology, highly customized products and a strong presence in the German market make ERA an excellent fit with Pulse," said Technitrol Chairman and Chief Executive Officer James M. Papada, III. "ERA's leadership in automotive coils, transformers and similar components position the business very well to capture what component industry analysts believe will be annual revenue growth in excess of 10%, thanks to the proliferation of electronic features in a typical vehicle -- features such as keyless entry systems, antilock brakes, steering-linked headlights and drive-by wire throttle, transmission, steering and suspension controls.
"We believe that ERA's solid engineering reputation and strong customer relationships will help Pulse's other divisions extend their presence in Germany, while Pulse's global engineering, marketing, sales and production network will help ERA penetrate markets well beyond Europe," Papada said. "We look forward to working with ERA's impressive team of managers and professionals to capture these exciting opportunities."
Based in Philadelphia, Technitrol is a worldwide producer of electronic components, electrical contacts and assemblies and other precision-engineered parts and materials for manufacturers in the data networking, broadband/Internet access, telecommunications, military/aerospace, automotive and electrical equipment industries. For more information, visit Technitrol's Web site at www.technitrol.com.
Cautionary Note: This message contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially. This release should be read in conjunction with the factors set forth in Technitrol's report on Form 10-Q for the quarter ended September 30, 2005 in Item 2 under the caption "Factors that May Affect Our Future Results (Cautionary Statements for Purposes of the 'Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995)."
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