Pentair Explores Strategic Alternatives for Its Tools Group

The $850 million cash transaction, which Pentair plans to complete in the second or third quarter of 2004, is subject to satisfaction of customary conditions and applicable regulatory approvals. Pentair expects to finance the purchase of WICOR, including the assumption of approximately $24 million of WICOR debt, through available and committed lines of credit. The acquisition is anticipated to be accretive to earnings in the first 12 months of ownership.

Pentair also announced that it has engaged Goldman, Sachs & Co. to explore strategic alternatives for its Tools Group, with 2003 sales of $1.08 billion, comprising the Porter-Cable, Delta, DeVilbiss Air Power, Oldham Saw, and FLEX businesses.

"The WICOR acquisition will transform Pentair into a diversified company defined largely by a $2 billion Water Technologies business," said Pentair Chairman and Chief Executive Officer, Randall J. Hogan. "Not only do we anticipate creating a significant water and wastewater systems business having some $900 million in sales, but we will also be operating a global pool and spa equipment business with revenues of roughly $600 million. We expect our revenues in the filtration and purification space to jump to approximately $500 million.

We would become considerably more global in scope, with anticipated total international water-related sales of 20 percent or about $400 million. This transaction will allow us to accelerate Pentair's growth through the more rapid creation of innovative products and systems, and capture cost savings and other synergies, thereby adding value for our customers and shareholders."

According to Richard J. Cathcart, president and chief operating officer of Pentair's Water Technologies Group, "This transaction represents a giant step toward our goal of satisfying the global need for safe, clean water. We expect to combine Pentair's proven operating disciplines with WICOR's strong customer orientation to enhance sales relationships with our customers, build our collective brands, grow our technology, accelerate the development of innovative products, expand our global footprint, and deliver superior products and service to our customers.

"Growing the sales of our Water Technologies business will be a top priority," Cathcart noted.

"Accomplishing that goal is a task made easier by the fact that both Pentair and WICOR possess strong management teams, have experience in the water industry, and have recognized products. There are also strong parallels in our company cultures, both of which are built on core values of integrity and respect."

Pentair has a solid record of success in managing the integration of acquired water businesses. In 2002, Pentair acquired the Plymouth Products water filtration equipment business from USFilter. In the first year of ownership by Pentair, Plymouth Product's profits improved 17 percent, while EBIT margins gained 150 basis points.

"Pentair has made 11 acquisitions in the Water Technologies arena since 1995, and each has increased sales, captured synergies, and contributed to Pentair's earnings within the first 12 months of ownership. We expect to generate similar results with the integration of WICOR," Cathcart said. "We have a rigorous integration planning process underway with a fully staffed integration planning office and more than a dozen teams for our business units and functional business support. We expect to save more than $30 million in the first full year of ownership, primarily through sourcing, supply chain, and manufacturing synergies."

Pentair said that although the Water Technologies Group will be its largest business, the Company remains committed to a diverse business mix.

"Our Enclosures Group has done a tremendous job of fighting through a difficult market downturn during the last three years," Hogan said. "Today, we believe this business is well positioned to continue growing profitably, as evidenced by its eight consecutive quarters of margin improvement. Our proven ability to capture organic growth in Enclosures is one of several strengths we expect to lever to create a larger business platform. In addition, we will continue to enjoy the benefits that a diverse business portfolio offers Pentair's shareholders."

In a separate announcement, Pentair said its fourth quarter 2003 earnings per share from continuing operations was $0.69, a 21 percent gain over fourth quarter 2002 EPS of $0.57.

Pentair's Water Technologies Group manufactures water and wastewater pumps for water systems; filters, control valves, tanks, and pressure vessels for filtration systems; and pool and spa equipment, with $1.06 billion in sales in 2003. The Group's key brand names include: Myers, Hydromatic, Aurora, and Fairbanks Morse pumps; Fleck and SIATA water conditioning valves; WellMate and Structural tanks; Plymouth Products, American Plumber, Pentek, and Everpure filtration products; National Pool Tile, Rainbow Lifegard, Kreepy Krauly, Letro Products, and Pentair Pool Products.

About Pentair, Inc.

Pentair is a diversified operating company headquartered in Minnesota. Its Water Technologies 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, serving industrial and electronic customers, and its Tools Group manufactures and markets innovative products under established brand names to professionals and do-it-yourself users. Pentair's 2003 revenues totaled $2.7 billion. The company employs more than 12,000 people in over 50 locations around the world.

This report contains statements that we believe to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including any statements about the company's anticipated sales, synergies or other results or expected benefits of the WICOR acquisition.

These forward-looking statements generally can be identified by the use of words such as "believes," "anticipates" or "expects," or words of similar import. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those currently anticipated, including the company's ability to integrate the WICOR acquisition successfully, the ability to obtain regulatory approvals of the acquisition on anticipated terms and schedule, and the risk that expected synergies may not be fully realized or may take longer to realize than expected. 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.

Pentair Acquisition of WICOR Industries

Background

Pentair Inc. (NYSE: PNR - News) entered into an agreement to acquire WICOR Industries, a unit within Wisconsin Energy Corporation (NYSE: WEC - News). WICOR Industries manufactures water pumps, water treatment products and fluid handling equipment.

The WICOR acquisition positions Pentair as a leader in the global water market, where worldwide demand is expected to exceed $350 billion in 2004. Completion of the transaction is expected in the second or third quarter of 2004, subject to customary regulatory approval and other conditions.

Pentair background

Pentair is a diversified operating company that builds value for stakeholders by acquiring, renewing, and developing manufacturing companies. With 2002 sales of $2.6 billion, Pentair comprises three core business groups: enclosures, tools, and water technologies. Headquartered in Golden Valley, Minnesota, the company employs 12,000 people in more than 50 locations around the world. Pentair common stock is traded on the New York Stock Exchange under the symbol PNR.

The Enclosures Group consists of Hoffman Enclosures, Pentair Electronic Packaging, and Pentair Enclosures Europe. Brand names include Schroff and Hoffman. Enclosure products include electrical and electronic enclosures, custom and off-the-shelf packaging solutions, datacom, telecom and server original equipment manufacturing. The Group employs 4,200 people in 13 locations worldwide.

The Tools Group consists of Delta, Porter-Cable, DeVilbiss Air Power Company, and the Tool Accessories Platform. Brands include Delta, Porter- Cable, Air America, Ex-Cell, Power Back, Oldham Saw, FLEX, Hickory, United States Saw, and Viper. Tool products include woodworking machinery, power tools, saw fences, woodworking accessories, retail air compressors and pressure washers, and generators. The Group employs 3,300 people in 10 locations in North America, Germany and Asia.

The Water Technologies Group manufactures water and wastewater pumps; control valves, tanks and pressure vessels for water conditioning systems; and pool and spa equipment. The Group employs 4,200 people in 21 locations around the world.

Pentair Water Technologies Group Background

Brands and Products

Pumps: Aurora, Fairbanks, Myers and Hydromatic. Pump product lines include well and irrigation, sump and sewage, fire, HVAC, municipal water and wastewater.

Pool and Spa: Pentair, Kreepy Krauly, IntelliTouch and National Pool Tile. Pool and spa products include pumps, filters, controls, lights and cleaners.

Water Treatment: Fleck, SIATA, Structural and CodeLine. Water treatment products include valves, tanks and membrane housings.

Filtration: Pentek, American Plumber, Armor and Everpure. Filtration products include filter cartridges (carbon & specialty), filter systems, housings and valve boxes.

Locations

Pentair Water Technologies has approximately 3 million square feet of manufacturing floor space worldwide. Manufacturing locations in the United States include California (2 locations), Illinois (2 locations), Kansas, New York, North Carolina, Ohio (3 locations), Arizona and Wisconsin (2 locations). International manufacturing facilities include Belgium, China, France (2 locations), India, Italy, South Africa and the United Kingdom.

Pentair Water Technologies also has 5 distribution locations throughout the world.

WICOR Industries Background

WICOR Industries is a unit within Wisconsin Energy Corporation, a Milwaukee-based company with a diversified portfolio of businesses engaged in electric generation; electric, gas, steam and water distribution; pump manufacturing; and other non-utility businesses.

WICOR is a leading global manufacturer of water pumps, water treatment products and fluid handling equipment, with $750 million in sales in 2003. WICOR employs 3,100 people worldwide in 24 locations worldwide. Its three major operations include Sta-Rite Industries, SHURflo Pump Company and Hypro Corporation.

Sta-Rite Industries: A worldwide manufacturer of pumps and water processing equipment, Sta-Rite serves the agricultural, residential, leisure, industrial and commercial markets. Its water systems, pool and spa, and water treatment products move and improve water in more than 100 countries.

SHURflo Pump Company: Provides a complete line of small air, water and electric driven pumps to the beverage, recreational vehicle, marine and water purification markets, and to key segments of the industrial market.

Hypro Corporation: Manufactures a complete line of pumps that are sold throughout the world in the agricultural, pressure cleaning, marine and fire service markets.

Brands and Products

Water Systems: Sta-Rite, Aermotor, Berkeley, Flotec, Diamond and Simer. Water systems products include a diverse line of high-performance pumps to serve the industrial, commercial and agricultural markets and pressurized water storage tanks. Water systems also produces basement dewatering pumps and sump, effluent and sewage products.

Pools: Sta-Rite and Onga. Manufactures pool and spa pumps, filters, cleaners, heaters, lights, fittings and accessories.

Spa and Bath: Vico, Onga, Sta-Rite and Ultra-Jet. Produces pumps, filters, cleaners, heaters, lights, fittings and accessories.

Water Treatment: Sta-Rite, Park International, Fibredyne and Omnifilter. Water treatment products include pumps, accumulators, filters, and many accessories to handle water system needs. Manufactures core technologies systems for water delivery and R.O. treatment, a full range of filter systems, water boost systems and a variety of water handling systems for residential, commercial and the food service industry.

Agriculture: Hypro, SHURflo and Berkeley. Offers a complete line of roller, centrifugal, piston and diaphragm pumps, as well as accessories and spray tips for all types of spraying applications.

Fire Services: FoamPro and Edwards. Produces foam proportioning systems for use in firefighting applications.

Recreational Vehicles: RV products include potable water pumps, general purpose pumps, faucets, water system accessories, water filtration products and pump repair and rebuild kits.

Marine: SHURflo, Hypro and Sherwood. Marine products include pumps for applications such as potable water, general purpose, livewell, bilge, washdown and maceration. Also markets faucets, water system accessories, water filtration products and pump repair and rebuild kits.

Food Service: SHURflo. The Fluid Solutions Group offers a broad line of products for the food service industry, from bag-in-box technologies to condiment systems to water filtration and purification.

Industrial: SHURflo, Hypro and Sherwood. Specially adapted pump product lines are available for agriculture, automotive, floor care and solar markets.

Locations

WICOR has approximately 2 million square feet of manufacturing floor space worldwide. Manufacturing locations in the United States include California (5 locations), Indiana, Minnesota (2 locations), Nebraska, New Hampshire, Oregon and Wisconsin. International manufacturing facilities include Australia, Canada, China, England, Germany, India, Italy (3 locations), Mexico (2 locations) and New Zealand.

WICOR also has sales and distribution locations throughout the world, including the United States (10 locations), Australia (6 locations), Canada (2 locations), Mexico (2 locations), Italy (2 locations), New Zealand (2 locations), England (2 locations), China, France, Germany, India, Kazakhstan and Russia.