Federal-Mogul Announces Agreement to Acquire Fel-Pro
12 January 1998
Federal-Mogul Announces Agreement to Acquire Fel-Pro
SOUTHFIELD, Mich., Jan. 12 -- Federal-Mogul Corporation
announced today an agreement to acquire Fel-Pro Incorporated, a
privately-owned manufacturer headquartered in Skokie, Illinois, for
$720 million. The transaction includes $225 million in common stock and
$495 million in cash. The sale is subject to regulatory approval and is
expected to close in the first quarter of 1998.
"Fel-Pro is the premier gasket manufacturer for the North American
aftermarket and OE heavy duty market. This is one of the best known, most
respected brand names in the industry and we expect to build on that
strength," said Dick Snell, chairman and chief executive officer of
Federal-Mogul. "We share similar values and cultures. Fel-Pro was recently
recognized as one of the top 100 best companies to work for."
This is the second recent acquisition Federal-Mogul has announced since
the company stated its intent to focus growth efforts on its core engine and
sealing systems businesses. In October, 1997, Federal-Mogul announced its
intent to acquire T&N, plc, a $3 billion supplier of engine and transmission
products. Upon completion of the Fel-Pro and T&N acquisitions, Federal-Mogul
will have grown from a $2 billion to a more than $5 billion company with a
global sealing business of $1 billion.
"Federal-Mogul is the ideal acquirer of Fel-Pro. They have the
leadership, resources, strategy and value systems in place to enable Fel-Pro
to achieve its objectives of pursuing international growth opportunities,
providing complete sealing capabilities and creating new aftermarket product
lines," said Kenneth Lehman and David Weinberg, co-chairmen of Fel-Pro.
"Federal-Mogul shares both our passion and vision to be customer focused,
and supports the value of a strong and productive team-oriented employee
culture. Together, the strategic fit of our products makes a compelling
market offering for both our aftermarket and OE customers," added Lehman, who
will be joining Federal-Mogul's Board of Directors.
Federal-Mogul expects to take an estimated $15-20 million pre-tax
restructuring charge and realize annual synergies of $35 million beginning in
1999.
In 1997, Fel-Pro had sales of approximately $500 million. The company has
more than 2,700 employees in 16 locations organized into four business units:
Gaskets, FP Diesel, FP Chemical Products, and FP Performance. Gasket sales
for 1997 were approximately $350 million and include cylinder head and molded
rubber gaskets, and marine and performance gaskets marketed under various
brand names including Permatorque Blue(R), Fel-Coprene(R), Print-O-Seal(R) and
PermaDry Plus(R). Gasket facilities are located in Illinois, Michigan, Canada
and Mexico.
FP Diesel which supplies heavy duty diesel engine parts and gaskets to the
worldwide diesel aftermarket, produces a complete line of gaskets and engine
parts for engine rebuilders with operations in California, Florida, Tennessee,
Wisconsin and England. FP Performance which supplies performance gaskets,
transmissions, and torque convertors to racers and enthusiasts has operations
in Illinois, Michigan and Mississippi. Fel-Pro Chemical, which provides
maintenance and repair chemicals to industrial distribution, manufactures
specialty lubricants, sealants, adhesives, and epoxy/urethane materials with
operations in Illinois, Colorado, Scotland and Colombia.
Headquartered in Southfield, Michigan, Federal-Mogul is a $2 billion
global manufacturer and distributor of a broad range of non-discretionary
parts primarily for automobiles, light trucks, heavy trucks, and farm and
construction vehicles. The company was founded in 1899. Visit the company's
web site at http://www.federal-mogul.com for more information.
Information in this press release contains forward-looking statements
which are not historical facts and involve risk and uncertainties. Actual
results, events and performance could differ materially from those
contemplated by these forward-looking statements including, without
limitations, the cost and timing of implementing restructuring actions, the
combination of the businesses of Federal-Mogul, T&N, and Fel-Pro, conditions
in the automotive components industry, certain global and regional economic
conditions and other factors discussed in this press release and those
detailed from time to time in the company's filings with the Securities and
Exchange Commission.
SOURCE Federal-Mogul Corporation