Pentair Completes the Sale of Its Tools Group to Black & Decker
Pentair, Inc. announced today it has completed the sale of its Tools Group to The Black & Decker Corporation of Towson, Maryland, for approximately $775 million.
"The sale of our Tools Group to Black & Decker completes the transformation of Pentair into a diversified manufacturer led by a $2 billion water business," said Randall J. Hogan, Pentair chairman and chief executive officer. "With all of our resources focused on the Water and Enclosures groups, we are now a stronger, more agile company with greater ability to achieve aggressive performance goals."
Pentair said that the proceeds from the sale of the Tools Group, together with borrowings from its existing revolving credit facility, were used to pay down the $850 million bridge loan associated with Pentair's July 31, 2004 acquisition of WICOR Industries. With the retirement of the bridge loan, Pentair's total debt to capital ratio drops below 40 percent, in line with Pentair's goals.
"We are executing our integration plans to achieve an estimated $30 million in net cost savings within the first full year," Hogan said. "We will continue to implement best practices to drive organic growth, to deliver innovative products and systems, and to further strengthen the brands, products and customer relationships that have been the cornerstones of success at Pentair and WICOR."
Hogan added that the integration activities to date have further strengthened his confidence in the combined businesses, including the capabilities of the management teams, the strong brand names, and the collective product offerings.
"We are aggressively pursuing opportunities to use our expanded scale, geographic breadth, and knowledge of the water markets to advance our global leadership position," Hogan said. "Our enhanced ability to provide competitively priced, high-quality products, increased customer responsiveness, and accelerated development of innovative new products gives us a significant advantage in achieving this goal."
Pentair said it is applying its strong cash flow to continue paying down debt and invest in its businesses for growth.
"Even while the integration of the former WICOR businesses is underway, we are capturing new organic growth in both our Water and Enclosures groups," Hogan said. "We will also continue to pursue opportunities to acquire additional water- or enclosures-related enterprises."
Pentair will report earnings for the third quarter of 2004 on Tuesday, October 26.
Pentair is a diversified operating company headquartered in Minnesota. Its Water Group is a global leader in providing innovative products and systems used worldwide in the movement, treatment, storage and enjoyment of water. Pentair's Enclosures Group is a leader in the global enclosures market, designing and manufacturing standard, modified and custom enclosures that house and protect sensitive electronics and electrical components. With 2003 revenues of $2.7 billion, Pentair has more than 13,000 employees worldwide.
Any statements made about the company's anticipated financial results are forward-looking statements subject to risks and uncertainties such as continued economic growth; the ability to integrate the WICOR acquisition successfully and the risk that expected synergies may not be fully realized or may take longer to realize than expected; foreign currency effects; retail and industrial demand; product introductions; and pricing and other competitive pressures. Forward-looking statements included herein are made as of the date hereof, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results.
Source: Pentair plc.