Newcor Announces Completion of Acquisitions
6 March 1998
Newcor Announces Completion of Acquisitions
BLOOMFIELD HILLS, Mich., March 5 -- W. John Weinhardt,
president and chief executive officer of Newcor, Inc. ,
announced today that Newcor completed the acquisitions for cash of 100% of the
common stock of the three corporations that comprise the Deco Group and l00%
of the common stock of Turn-Matic, Inc. As a result of these acquisitions,
and the acquisition of Machine Tool & Gear, Inc. which closed on December 23,
1997, Newcor has taken a significant step in accelerating its strategy to
become a leading supplier of high volume precision machined engine,
transmission, and powertrain components and assemblies to the automotive,
medium and heavy duty truck, and agricultural/off-road vehicle industries.
The three acquisitions, which had pro forma fiscal 1997 sales of
approximately $112 million, complement Newcor's existing product and customer
base, while adding a substantial new product position in engine components and
assemblies and a key new market position in the medium and heavy duty truck
industry. Newcor's expanded Precision Machined Products segment will be
capable of providing customers with a broad range of manufacturing processes
and value-added capabilities such as design and engineering, assembly and
testing, and program management from concept development through production
and assembly.
With the closing of these three acquisitions, Newcor's Precision Machined
Products segment pro forma 1997 sales were over $172 million. Combined with
sales from Newcor's Rubber and Plastic segment, Newcor's sales of components
and assemblies to the automotive, medium and heavy duty truck and agricultural
and off-road vehicle industries were over $220 million on a pro forma basis
for 1997, comprising approximately 91% of total sales.
Newcor expects to continue the aggressive implementation of its strategy
to become a leading supplier of precision machined engine, transmission and
powertrain components and assemblies and high value-added molded rubber and
plastic products for the automotive, medium and heavy duty truck and
agricultural/off-road vehicle industries. This strategy calls for continued
internal growth from new business opportunities, coupled with additional
targeted acquisitions to complement these core businesses. Newcor plans to
create increased shareholder value through growth. The acquisitions were
financed with net proceeds from the private placement of $125,000,000
principal amount of Newcor's 9.875% Senior Subordinated Notes due March 2008
which was announced on February 27, 1998. The terms of the notes require
Newcor to suspend its cash dividend. The elimination of the cash dividend is
consistent with Newcor's growth strategy.
Newcor, headquartered in Bloomfield Hills, Michigan, designs and
manufactures precision machined and molded rubber and plastic products as well
as custom machines and manufacturing systems. Newcor is listed on the Nasdaq
Stock Market under the symbol NEWC.
Cautionary Statements Under the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995
This press release contains information that constitutes "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. A number of factors could cause actual results to differ materially
from those included in or suggested by such forward-looking statements,
including without limitation: the cyclical nature of the industries served by
the Company, all of which have encountered significant downturns in the past;
the level of production by and demand from the Company's principal customers,
upon which the Company is substantially dependent including the three major
domestic automobile manufacturers, American Axle & Manufacturing, Inc.,
Detroit Diesel Corporation and Deere & Company; whether, when and to what
extent expected orders materialize; whether the Company will be able to
successfully integrate the acquisitions of Machine Tool & Gear, the Deco Group
and Turn-Matic into the Company's pre-existing operations and operate them
profitably; and the extent to which it is successful; the impact on the
Company of actions by its competitors, some of which are significantly larger
and have greater financial and other resources than the Company. All forward-
looking statements in this press release are qualified by such factors. The
Company disclaims any obligation to update any such forward-looking
statements.
SOURCE Newcor, Inc.