The Auto Channel
The Largest Independent Automotive Research Resource
The Largest Independent Automotive Research Resource
Official Website of the New Car Buyer

Arvin to Acquire Purolator Automotive Filters for $276 Million

8 February 1999

Arvin to Acquire Purolator Automotive Filters for $276 Million; Adds Major Product Category; Provides Growth in Both Replacement and OE Segments

    COLUMBUS, Ind.--Feb. 8, 1999--Arvin Industries, Inc. , today announced that it has reached an agreement to acquire the Purolator Products automotive filter business from Mark IV Industries, Inc. Purolator has sales of approximately $345 million. The transaction value of $276 million includes the assumption of $6 million in debt. The acquisition is subject to regulatory review. Arvin expects to close the transaction in the first quarter of 1999.
    Purolator is a leading independent manufacturer and distributor of automotive oil, air, fuel and cabin filters in North America for the replacement and original equipment markets. Purolator(TM) is also an automotive legend whose brand name is one of the oldest and best established in the industry. The legend began with the creation of the first automotive filter in 1923. The filter was called "Purolator" by its inventor ... short for the words "pure oil later." Today, the promise of the Purolator name continues to ring true. The Purolator brand includes more than 2,000 part numbers for automotive, light truck, and heavy duty applications.
    V. William Hunt, President and Chief Executive Officer, said, "Purolator fits into Arvin's automotive replacement growth strategy perfectly. It is one of the strongest, most widely known brand names in the industry. One out of three vehicles operating in North America is equipped with a Purolator filter. When Purolator is added to Arvin's own Maremont(TM) exhaust, Gabriel(TM) ride control, and StrongArm(TM) gas springs brand names, we create tremendous synergies among our brand name replacement products. We also look forward to fully developing opportunities for private label programs with those customers who prefer using their own brand names. A growing market presence in Europe and the rest of the world can be enhanced without significant additional investment. The similarity of Arvin and Purolator's customers and distribution channels should result in important cost reduction opportunities while increasing the number of retail and wholesale customers.
    "Purolator is also a leading supplier of filters to the vehicle makers and their service parts organizations," Hunt further explained. "OE customers include Ford, DaimlerChrysler, Toyota, Subaru, Mazda, Navistar and Nissan. We look forward to providing filters to all of Arvin's OE customers.
    "In summary, the acquisition of Purolator will result in several key benefits to Arvin.

--   The transaction is expected to result in a Return on Invested
     Capital (ROIC) in excess of Arvin's cost of capital.

--   The acquisition will be accretive to earnings in 1999 and should
     add significantly to earnings per share in 2000.

--   A repositioning of Purolator's manufacturing and distribution
     operations begun by Mark IV will be intensified by Arvin through
     application of its Arvin Total Quality programs. Identified
     pre-tax cost savings are estimated to exceed $10 million per
     annum by 2001.

--   E.p.S. projections do not include the effect of any top line
     growth from the expansion of Purolator sales to existing Arvin
     customers or the benefit of the Purolator brand name and
     extensive distribution to sales of Arvin's existing products."


    Arvin plans to finance the transaction using an arranged credit facility from its lenders. The company plans eventually to put in place a permanent capital structure that reflects its longer-term financial needs and goals. Arvin does not expect the transaction to result directly in any significant one-time charges.
    Certain information and statements included or implied are forward looking and involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These forward-looking statements are identified by their use of terms and phrases such as "expected," "expect," "should," "estimated earnings," "anticipate," and "believe." Information about potential factors identified by the Company which would affect the actual financial results are included in the Company's Form 8-K, filed January 3, 1997, with the SEC.
    Arvin Industries, Inc., is a global manufacturer of automotive components with over 50 manufacturing facilities and eight technical centers located in 19 countries. Arvin is a leading manufacturer of automotive exhaust systems, ride control products, and gas charged lift supports. Our replacement products are sold under various trademarks including Arvin, Maremont, Timax, ANSA and ROSI for exhaust systems, Gabriel in shock absorbers, and StrongArm gas charged lift supports.
    For more information on Arvin Industries via the Internet, visit our Corporate Home Page at http://www.arvin.com or our Corporate News on the Net site at http://www.businesswire.com/cnn/arv.htm. For information via fax, please call our News On Demand service at 888-622-1161.