Penn Engineering & Manufacturing Corp. to Acquire R. C. Dudek & Company, Inc.

16 September 1999

Penn Engineering & Manufacturing Corp. to Acquire R. C. Dudek & Company, Inc.

    DANBORO, Pa.--Sept. 16, 1999--Penn Engineering & Manufacturing Corp.) today announced that it has signed a definitive agreement to acquire R. C. Dudek & Company, lnc., of Oxnard, California, a privately-held distributor of fasteners, for $36.2 million in cash.

    R. C. Dudek & Company, Inc. distributes a variety of fastener lines, and is also an authorized distributor for Penn Engineering's fastener products. The Company's sales in 1998 were $31 million. After eliminating inter-company sales to Dudek, Penn Engineering's consolidated sales, on a pro-forma basis, will increase approximately $10 million.

    Penn Engineering's consolidated sales were $180 million in 1998.
    In commenting on the acquisition, Ken Swanstrom, Chairman and CEO of Penn Engineering, stated, "the Dudek acquisition is an excellent strategic fit for our Company. It allows us to expand into direct sales of fasteners, including products manufactured by other companies, and it affords us additional margins on our existing fastener sales. It also gives us the opportunity to have direct contact with our end-user customer base, so that we will have more quantifiable information about trends and issues at the end user level."

    "We can also use the expertise in distribution that we are acquiring with the R. C. Dudek & Company to expand our Doncaster, U.K., and Singapore operations to multi-line distribution. Each of these locations currently distribute only Penn Engineering products."

    "From a financial standpoint, this acquisition will be accretive to earnings per share over a twelve month period starting in 2000", Mr. Swanstrom concluded.

    The acquisition is expected to be closed on October 1,1999.

    Business Summary:

    Penn Engineering & Manufacturing Corp. is the leading manufacturer of self-clinching fasteners used by the computer, datacommunications, telecommunications, general electronics, automotive, and avionics industries.

    The Company's Pittman division manufactures high performance permanent magnet dc motors used in electronics, medical, data storage, and office automation applications.