Walbro Corporation Enters Into Merger Agreement with TI Group
28 April 1999
Walbro Corporation Enters Into Merger Agreement with TI Group
AUBURN HILLS, Mich., April 28 -- Walbro Corporation,
based in Auburn Hills, Michigan, announced today that it has
entered into a definitive merger agreement with TI Group plc, headquartered in
London, England, pursuant to which Walbro will become a wholly-owned
subsidiary of TI Group. The all-cash transaction of $20.00 per share values
Walbro at $570 million and is subject to customary regulatory approvals. The
Board of Directors of both companies have unanimously approved the merger
agreement and will be effected through a tender offer launched by TI Group.
Walbro is a global leader in the automotive and small engine fuel storage
and delivery systems and components business with 1998 sales of $680 million.
Walbro has a number of joint ventures with sales of $210 million.
TI Group is a $3.5 billion (sales) global specialized engineering company
with four world leader businesses: John Crane (engineered sealing systems),
Forsheda (engineered elastomer seals), Bundy (fluid carrying systems) and
Dowty (aerospace systems). TI will combine its existing Bundy automotive fuel
business with Walbro to create a strong global position in supplying complete
automotive fuel storage and delivery systems. Walbro has operations in
15 countries while TI's Bundy business operates in 27 countries.
Sir Christopher Lewinton, Chairman of TI Group, commented, "This
attractive acquisition is consistent with the strategy TI Group has followed
over a number of years and I am very pleased that, on completion, it will
enable TI to form a new TI Automotive Systems group of which Walbro and Bundy
will be key businesses. I am confident that the combination of these
two businesses within TI Automotive Systems will accelerate growth of this
important part of the Group."
The new TI Automotive Systems group will have important positions in
three key fluid handling automotive markets for brake, fuel and powertrain
systems. The combined revenues of this new group in 1998 would have been
approximately $2.0 billion.
On completion of the transaction, Frank E. Bauchiero, President and Chief
Executive Officer of Walbro, will report to Bill Laule, Chief Executive
Officer of TI Group in England.
Walbro consists of two businesses: a $530 million automotive fuel storage
and delivery systems business and a $150 million fuel systems business for
small engines. The $530 million automotive fuel systems business is
complementary to TI's existing $375 million Bundy fuel delivery systems
business consisting of rigid and flexible lines and quick connectors.
Mr. Bauchiero commented, "We are very pleased that our mutual efforts have
resulted in a merger agreement which offers significant benefits to
shareholders, customers, employees and joint venture partners, as well as to
the communities where we are located. We believe that this combination with
TI strengthens the global reach of both companies and offers current and
potential customers of both businesses an impressive array of products and
systems that enjoy strong market positions. Moreover, the respective cultures
of both companies are very similar. We believe that merging these talents
will have a positive, synergistic effect on the competitiveness of the
combined company."
Bill Laule, Chief Executive Officer of TI Group, commented, "I am
delighted that we are able to make this recommended offer for Walbro. With
the strong strategic fit and sustained investment in new facilities, this
acquisition now gives us the opportunity to continue Walbro's strong record of
sales growth, enhance its margins and deliver increased profitability and cash
generation. The creation of a uniquely positioned TI Automotive Systems
group, capable of supplying a completely integrated fuel storage and delivery
system on a global basis, moves the business further up the added value chain.
The enlarged market that will now be served by us provides great potential for
accelerated growth and ideally positions TI Automotive Systems to enjoy even
greater success in the future, and contribute to improved shareholder value."
Walbro Corporation was advised in this transaction by the investment
banking firm of Salomon Smith Barney, Inc. and the law firm of Katten, Muchin
& Zavis.
Walbro Corporation is a designer and manufacturer of precision fuel
systems and products for automotive and small engine markets. Walbro
Corporation has subsidiaries and joint ventures throughout the world,
including North and South America, Europe and Asia. Walbro common stock is
traded on the Nasdaq National Market under the symbol WALB.