Faiveley Transport Acquires Sab Wabco from Vestar Capital Partners to Create a World Leader in On-Board Railway Systems.NEW YORK New York, state, United StatesNew York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of & PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. -- Faiveley Group, Sagard and Vestar Capital Partners announced today that Faiveley Transport signed a share purchase agreement to acquire the entire share capital of Sab Wabco, a European leader in brake systems for the railway industry. The enterprise value (before deduction of net debt) for the acquisition of Sab Wabco is EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 310m (or $381m). The acquisition of Sab Wabco and the refinancing of its existing bank debt will be financed by bank debt of up to EUR 230m underwritten by a pool of financial institutions led by Societe Generale and BNP Paribas BNP Paribas (Euronext: BNP, TYO: 8665 ) is one of the main banks in Europe and France. It was created on 23 May 2000 through the merger of Banque Nationale de Paris (BNP) and Paribas. , and by a capital increase amounting to EUR 100.4m reserved for Sagard and the management teams of Faiveley Transport and Sab Wabco. The implied enterprise value of the combined entity (Faiveley Transport and Sab Wabco) amounts to EUR 516m and the implied equity value after the capital increase to EUR 286m. The newly formed entity, controlled by Faiveley S.A., will become one of the world leaders in on-board railway systems with a broadened offer ranging from HVAC (Heating Ventilation Air Conditioning) In the home or small office with a handful of computers, HVAC is more for human comfort than the machines. In large datacenters, a humidity-free room with a steady, cool temperature is essential for the trouble-free , electromechanics and electronics to brake systems, couplers and wheels. Synergies between the two companies should strengthen Faiveley Transport's growth potential and further increase its profitability. For the year ended March 31st, 2004, the two companies had combined pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma sales of EUR 581m(1), a pro forma operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of EUR 59m(1) and an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 10.2%. Faiveley Transport's net debt will amount up to EUR 230m after the acquisition, which will preserve its substantial operational investment capacity. Faiveley S.A., the current holding company of Group Faiveley, will remain the majority shareholder of Faiveley Transport in shares and voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. which will be split as follows: 61.7% for Faiveley S.A., 35.9% for Sagard and 2.4% for the management of Faiveley Transport and Sab Wabco. A shareholders' agreement shareholders' agreement n. an employment agreement among the shareholders of a small corporation permitting a shareholder to take a management position with the corporation without any claim of conflict of interest or self-dealing against the shareholder/manager. will define the relationships between Faiveley S.A. and the other shareholders of Faiveley Transport. Its main terms will be made public upon the closing of the Sab Wabco acquisition and the Faiveley Transport capital increase. Robert Joyeux, the current CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Faiveley Transport, will be in charge of the combined entity, with a management team combining managers from Faiveley Transport and Sab Wabco. Francois Faiveley, chairman of Faiveley S.A. said: "I am delighted with the acquisition of Sab Wabco, which enables us to form one of the world leaders in railway equipment. The brake activity of Sab Wabco perfectly complements the range of products offered by Faiveley Transport, which is already a leader in HVAC, electromechanics and on-board electronics. I am convinced that the quality and the motivation of the management will contribute to the successful integration of the two companies." "We are very pleased to participate with the Faiveley Group in this new stage of development of its Transport division," declared Chris Spencer, the partner at Sagard in charge of the transaction. "This transaction reflects Sagard's core strategy, which is to act as the catalyst to major industrial projects supported by skilled management teams." Robert Rosner, President of Vestar Capital Partners Europe said: "The merger of these two industry leaders is very powerful and has always been considered as the dream business combination." Mr Rosner added: "We congratulate Sab Wabco's senior management team for having delivered such outstanding performance over the years resulting in significant value creation for the company and its shareholders." The Sab Wabco acquisition and the Faiveley Transport capital increase should be completed in November 2004. Nevertheless, these transactions remain subject to the agreement of the antitrust authorities and the absence of any material adverse change affecting Sab Wabco. Rothschild advised both Faiveley and Sagard on this transaction and Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. advised Sab Wabco. About Faiveley, Sab Wabco, Sagard and Vestar Capital Partners FAIVELEY The activities of the Faiveley Group can be broken down into two highly technological sectors: --Railway: designing & manufacturing of railway equipments; and --Plastics: injection of complex technical devices (ball-bearing cages, perfumery per·fum·er·y n. pl. per·fum·er·ies 1. Perfumes. 2. An establishment that makes or sells perfume. 3. The art of making perfume. Noun 1. sticks, etc.) Faiveley Transport is a wholly-owned subsidiary of Faiveley S.A., specializing in the designing and manufacturing of railway equipment, with four ranges of products: HVAC, electromechanics (doors, power collecting, etc.), electronics and customer services. For the year ended March 31st, 2004, Faiveley Transport had total revenues of EUR 253.2m, of which 36% was in France and 40% in the rest of Europe, and a 9.2% operating margin. The backlog represents more than 1.6x this year's sales. SAB WABCO Sab Wabco is a group specializing in the designing, manufacturing and marketing of brake systems, wheels and couplings for the railway industry. In 2003, Sab Wabco had a total turnover of EUR 325.2m, of which 14% was in France and 71% in the rest of Europe, and a 11% operating margin. The backlog represents more than 1x this year's sales. SAGARD Sagard is a European specialist in private equity created by the Power Corporation (Groupe Desmarais). Based in Paris, Sagard targets mainly medium sized companies capable of becoming leaders in their market. It invests jointly along with ambitious and experienced management teams, in order to help them implement medium to long-term industrial projects. During the first semester of 2004, Sagard acquired both AFE (Apple File Exchange) An earlier Macintosh utility that converted data files between Mac and PC formats. It also included a file translator between IBM's DCA format and MacWrite. (a European specialist in plastics and cast steel) and Le Groupe Moniteur (a French leading media group dedicated to construction and public authorities) and took a participation in Vivarte (a major competitor in the specialized distribution market (clothing and footwear) in Europe). VESTAR CAPITAL PARTNERS Vestar Capital Partners is a leading investment firm specializing in management buyouts, recapitalizations and growth capital investments. Vestar's investment strategy is targeted towards middle-market companies in the US and Europe with valuations in the $200 million to $2 billion range. Since the firm's founding in 1988, Vestar has completed over forty-five investments in companies with a total value exceeding $15 billion. These companies have varied in size and geography and span a broad range of industries. Vestar Capital Partners acquired Sab Wabco in 2002. The acquisition represented the firm's second investment in the railway equipment supply industry, having previously led the management buyout of Westinghouse Air Brake Company The air brake was invented by George Westinghouse of New York State in 1868. He moved to Pittsburgh, Pa., where he established the Westinghouse Air Brake Company (WABCO). which was subsequently listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . Vestar currently manages funds totaling approximately $4 billion and has offices in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , Denver, Boston, Paris, and Milan. More information about Vestar is available at www.vestarcapital.com.
(1) Pro forma financial data are based on accounting standards
currently in force in both companies
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