Textron Makes Offer for David Brown Group plc
4 September 1998
Textron Makes Offer for David Brown Group plc; UK-Based Company Provides Growth Platform for Fluid and Power Systems Group
PROVIDENCE, R.I.--Sept. 4, 1998--Textron Inc. and David Brown Group plc of the United Kingdom (London Stock Exchange: DBG.L) today announced an agreement on the terms of Textron's offer to acquire the entire issued capital stock of David Brown for approximately $326 million ((pound)195 million), plus the assumption of debt.Subject to the acceptance of 90 percent of David Brown's ordinary shares and certain regulatory clearances, the transaction is targeted for completion early in the fourth quarter.
"We view David Brown as a cornerstone business offering a strong, global platform to accelerate growth in our Industrial segment's Fluid and Power Systems group," said Textron President and Chief Executive Officer Lewis B. Campbell. "With approximately $400 million in annual sales and 72 facilities in 23 countries, this world-class industrial component manufacturer adds critical mass and significant global reach to our Fluid and Power Systems group," he added.
David Brown Chairman Chris Cook said, "Becoming part of Textron will provide our company with access to resources, together with a greatly enlarged platform in fluid handling and power transmission, from which we can jointly develop our activities."
Textron's Fluid and Power Systems group is focused on three distinct competencies: fluid handling systems, power transmission and motion control. David Brown brings the group's annual revenues to approximately $1 billion. "We see significant growth potential for Textron in the global fluid and power systems market," said Textron Executive Vice President and Chief Operating Officer Herbert Henkel.
"Our growth strategy for the Fluid and Power Systems group is consistent with what we've done to build and grow our Fastening Systems business," Henkel explained. "After establishing a strong foundation of core businesses, we intend to make strategic, `bolt-on' regional acquisitions that build upon that foundation and present opportunities for synergies with other Textron companies. David Brown is an important part of the Fluid and Power Systems group's foundation, given its market leadership position in mechanical power transmission and fluid handling systems."
David Brown's products include industrial gears and mechanical and hydraulic transmission systems used in a wide range of applications -- from industrial machinery, such as conveyors, to transportation applications, such as rail traction gears. The company also manufactures industrial pumps for the oil, gas and petrochemical industries.
"These products are the innerworkings of a wide-range of finished goods, equipment and processes," Henkel explained. "They help to transfer power -- moving people, machinery and fluids faster and better."
Headquartered in Huddersfield, England, David Brown Group plc has approximately 3,250 employees at 72 facilities in 23 countries including Australia, Canada, France, Germany, Indonesia, Japan, Thailand, UK, US and South Africa. "David Brown adds new, key locations to Textron's global manufacturing presence, supporting the company's goal of achieving and maintaining more than 40 percent of revenues from non-US sources," said Campbell. Textron's year-end 1997 international revenues totaled 39 percent.
Part of Textron's Industrial Segment, the Fluid and Power Systems group serves the aerospace, automotive, industrial and defense industries. Textron's four Fluid and Power Systems businesses include Cone Drive Textron, makers of double-enveloping worm gear speed reducers, gear sets and gear motors; HR Textron, manufacturers of motion control components and systems; Maag Pump Systems Textron, producers of gear pumps and systems; and Textron Systems, developers of defense systems and advanced sensors.
Textron Inc. is a $10.5 billion, global, multi-industry company with market-leading operations in Aircraft, Automotive, Industrial and Finance.