CINCINNATI MILACRON TO BUY GTE'S VALENITE SUBSIDIARY; SAYS INDUSTRIAL CONSUMABLE MAKER IS 'EXCELLENT FIT'
-- Milacron's Grinding Wheels, Fluids In Closely Related Markets CINCINNATI and STAMFORD, Conn., Dec. 21 /PRNewswire/ -- Cincinnati Milacron Inc. (NYSE: CMZ) and GTE Corporation (NYSE: GTE) today jointly announced a definitive agreement under which Milacron will purchase GTE Valenite Corporation for approximately $80 million in cash and assumed debt. Valenite is one of the world's leading producers of industrial metalcutting products such as carbide inserts, special and standard tooling systems, and gaging products. In addition, Valenite produces tools for the coal mining and road construction industries and carbide die and wear products, with strong market positions in each of its business segments. Its 1991 sales were $275 million, with about 30% of that total in Europe, Asia and South America. The transaction is part of GTE's previously announced plan to focus on its telecommunications businesses. The transaction is expected to be completed early in 1993. At the time of the closing, Valenite will become a wholly owned subsidiary of Cincinnati Milacron Inc., and Valenite employees will remain employees of the subsidiary. "Better Balance" And "An Excellent Fit" "The acquisition of Valenite will help us achieve a key strategic objective," said Daniel J. Meyer, Milacron's chairman and chief executive officer. "And that objective is a better balance among our three main core businesses: machine tools, plastics processing equipment and industrial products. Now, more than one-third of our revenues will come from our industrial products group," he said. "With Valenite's sales, Milacron's annual revenue will top $1 billion," Meyer pointed out, "and we will have a leadership position in the industrial consumables area, a $15 billion market worldwide. This is a business that -- in contrast to the machinery business -- requires relatively small capital investment, has less severe business cycles, faces limited import competition, and historically has good earnings and cash flow," he said. "Valenite's operations are unquestionably an excellent fit with the precision grinding wheels and metalworking fluids produced by our industrial products group," said Alan L. Shaffer, Cincinnati Milacron's group vice prs?ident of industrial products, to whom Valenite will report. "There are also obvious synergies with our machine tool operations and products," he added. "We are extremely pleased to be joining an outstanding industrial products company such as Milacron, whose businesses are so closely related to ours," said Donald G. Otero, president of Valenite. "It's especially encouraging to us because Milacron is as dedicated to product innovation and customer service as we are." Financing "Acquisition financing will be accomplished through an increase in committed lines of credit and a trade receivables financing program," said Milacron's Meyer. "Also, we intend to assume approximately $10 million of existing Valenite borrowings," he explained. "Subsequent to the closing of the transaction, however, we anticipate structuring more permanent financing. "With the support of our banks in this transaction, we're pleased that the financing structure will provide more than sufficient funding to continue our Wolfpack new product development programs for both machine tools and plastics machinery," Meyer said. "Furthermore, Milacron and Valenite management teams are working together to formulate a program to increase cash flow and strengthen profitability," he added. Valenite Profile Valenite, headquartered in Troy, Mich. is the second largest producer of metalcutting tooling systems in the U.S. market and the third largest worldwide. It is the U.S. market leader in coal mine tooling and second in the U.S. for road construction tooling. It has a solid position in the worldwide engineered die and wear components market. With one of the most comprehensive lines of metalcutting tooling, Valenite has a reputation for high quality and new product development, with hundreds of patents issued and pending. Valenite employs approximately 2,700 people worldwide and operates major manufacturing facilities in six states and nine other countries. The company also has nine domestic direct sales offices and 42 sales and service locations in 16 countries. Cincinnati Milacron Profile Cincinnati Milacron, headquartered in Cincinnati, is a world leader in advanced manufacturing technologies for the metalworking and plastics processing industries. Its products include machine tools, plastics processing machinery, composites processing systems, computer controls, software, flexible manufacturing cells and systems, precision grinding wheels and metalworking fluids. With 1991 sales of $754 million, Milacron has approximately 6,000 employees worldwide and 18 plants in the U.S. and Europe. Its shares are traded on the New York Stock Exchange under the symbol CMZ. -0- 12/21/91 /CONTACT: Albert Beaupre of Cincinnati Milacron, 513-841-7241; or Tony Hamilton of GTE, 203-965-2853/ (CMZ GTE)
CO: Cincinnati Milacron Inc.; GTE Corporation ST: Ohio, Connecticut IN: SU: TNM
TS -- NY006 -- 8616 12/21/92 09:04 EST
|Printer friendly Cite/link Email Feedback|
|Date:||Dec 21, 1992|
|Previous Article:||WARNER-LAMBERT VOLUNTARILY RECALLING SELECT DRUGS FROM DIRECT ACCOUNTS|
|Next Article:||A.M. BEST LOWERS TRAVELERS LIFE/HEALTH RATING|