Williams Controls Aquires ProActive Pedals
30 July 1999
Williams Controls Acquires Designer and Manufacturer Of Patented Adjustable Foot Pedal Systems
Potential Domestic Market $250 Million
PORTLAND, Ore., July 29 -- Williams Controls, Inc.
announced that it has purchased the assets of the ProActive
Pedals division of Active Tool & Manufacturing Co., Inc. of Roseville,
Michigan. ProActive Pedal is a leading designer and developer of patented
adjustable foot pedal systems and modular pedal systems.
Under the terms of the transaction, Williams Controls acquired the assets
of ProActive Pedal which includes state-of-the-art designs, technical know-how
and patent rights on adjustable foot pedal systems, as well as designs of
modular foot pedal systems. The purchase price was $5.75 million plus the
assumption of approximately $350,000 of liabilities. The Company signed an
amended patent licensing agreement with the original designer of the ProActive
adjustable foot pedal which gives the Company the exclusive rights to future
modular and adjustable foot pedal designs. The purchase was financed through
a private placement of Williams Controls' common stock placed primarily with
Microcap institutional investors by Taglich Brothers, D'Amadeo, Wagner &
Company and through a loan from Wells Fargo Bank.
ProActive was the first manufacturer of adjustable foot pedals supplying
the high-performance Dodge Viper, which it continues to produce today.
ProActive is working on several programs with the Big Three automotive
companies for adjustable pedal systems for introduction in model years 2001
and 2002. In addition, ProActive currently employs a seasoned design
engineering staff that specializes in foot pedal design that has worked
together as a team for a number of years. ProActive has taken a unique
approach to adjustable pedal designs that the Company believes provides
superior functionality and reliability, and better suits mass production
processes as compared with any competitive product currently in the market.
Although in design for a number of years, adjustable foot pedal systems
have only recently emerged as a rapidly growing product. The product allows
the driver to adjust the gas, brake and clutch foot pedals towards the driver
and reduces the distance that a driver must adjust the seat forward. This
feature not only improves driver comfort, but it also positions the driver
further away from the vehicle's airbag, addressing an issue that has recently
become a heightened safety concern for both drivers and auto manufacturers.
The Big Three automotive companies are embracing this new feature after
receiving immediate positive consumer feedback during the last year. In a
June 28, 1999 article in Automotive News, a Ford representative stated " ...
we are going to put it into as many vehicles as we can." Ford installs a
competitor's adjustable foot pedals as standard equipment on the 1999 Lincoln
Navigator and as an option on the 1999 Ford Expedition.
"This strategic acquisition is an important element of our company's
mission to penetrate the automotive market with Williams' electronic throttle
control (ETC) technology," stated Thomas W. Itin, chairman and chief executive
officer of Williams Controls. "Within three years, this is a market that
could represent up to 5 million units of the 15 million annual unit volume of
passenger vehicles produced in the United States. By combining this patented
technology with our superior ETC technology and experience, Williams Controls
will be in a strong position to become a major automotive supplier in this
category in the future."
"Our strategy is to be the leader in pedal systems," said Timothy J.
Marker, vice president of marketing and sales for Williams Controls. "Our
customers will be awarding more business to system suppliers that provide one
stop shopping to automobile and truck manufacturers. This acquisition gives
Williams the capability to supply a modular pedal system that includes the
brake, clutch and throttle control, with the further option of adjustable
pedal systems which can use either mechanical or electronic control systems.
We also feel this product will be popular in the heavy truck market where
Williams is the preeminent leader of electronic throttle controls."
"Williams will manufacture the sensor component and electronic modules for
these units at its Aptek Williams facility in Deerfield Beach, Florida,"
continued Mr. Marker. "Our vertical integration with these products will give
Williams the cost and competitive advantage that should allow the company to
win a significant share of this emerging market. This acquisition is a major
step towards fulfilling our stated corporate goal of achieving sales of $200
million by the year 2002."
Williams Controls is a manufacturer and integrator of sensors, controls
and communications systems for the transportation and communication
industries. For more information, visit the Company's website at http://www.wmco.com
The statements included in this press release concerning predictions of
economic performance and management's plans and objectives constitute forward-
looking statements made pursuant to the safe harbor provisions of Section 21E
of the Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1934, as amended. These statements involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. Factors which could cause or contribute to such
differences include, but are not limited to, factors detailed in the Company's
Securities and Exchange Commission filings; economic downturns affecting the
operations of the Company or any of its business operations, including
ProActive; the failure of the Company or ProActive to be awarded final
contracts for the sale of their products; and the unavailability of financing
to complete management's plans and objectives. The forward-looking statements
contained in this press release speak only as of the date hereof and the
Company disclaims any intent or obligation to update these forward-looking
statements.