CLEVELAND, July 14 /PRNewswire-FirstCall/ -- Applied Industrial Technologies today announced it has agreed to acquire the assets of Fluid Power Resource, LLC (FPR) and the following seven fluid power distribution businesses: Bay Advanced Technologies, Carolina Fluid Components, DTS Fluid Power, FluidTech, Hughes HiTech, Hydro Air, and Power Systems. These businesses employ 455 people and generated 2007 annual sales of $244 million.
The $169 million all-cash purchase of FPR will be funded with a combination of existing cash and financing through established credit facilities. The transaction is expected to close upon the approval of the parties' Hart-Scott-Rodino filings and certain other conditions. Each of the businesses will operate as a subsidiary of Applied and will maintain their current local identities. The companies will be led by Warren E. (Bud) Hoffner, Vice President, General Manager-Fluid Power, who oversees Applied's fluid power business unit.
"The addition of these 19 FPR locations, together with their corporate resources, extends our fluid power footprint within North America and increases Applied's capabilities in the areas of fluid power system integration; manifold design, machining, and assembly; and the integration of hydraulics with electronics for complete machine design," said Bud Hoffner. "I am looking forward to working with this high caliber team under the Applied umbrella."
"Applied has a strong track record in developing their fluid power capabilities, and their philosophy of semi-autonomous leadership for their subsidiaries is a great match for our Fluid Power Resource businesses," stated Denis P. McCarthy, President of FPR. "With strong local leadership and local talent, our customers will continue to receive outstanding service backed by a strong, stable financial presence, making the transaction a win-win situation."
According to spokesman Todd A. Barlett, Applied has grown substantially since 1997 nearly doubling its sales through a combination of organic growth and a total of 23 acquisitions. "The FPR businesses are strong, well- performing companies, and we expect the acquisition will be accretive for our shareholders immediately. We are in a good position to pursue additional acquisitions that are aligned with our geographic and product needs and offer a good return to our shareholders," said Barlett, Vice President - Acquisitions and Global Business Development for Applied. With this acquisition, Applied's fluid power business group will serve customers through 67 sales and service facilities in the U.S., Canada and Mexico.
About The Acquired Distribution Businesses
Bay Advanced Technologies employs 156 people who provide solutions to automation and control applications. It operates three locations in Austin, TX; Newark, CA; and Mission Viejo, CA.
Carolina Fluid Components distributes hydraulic and pneumatic components, electronic controls required to operate fluid and air-powered systems, and after-market parts for maintenance and repair. The company employs 60 people at operations in Charlotte, NC and Norcross, GA.
DTS Fluid Power is a mobile hydraulics distributor. The company employs 38 people at locations in Grandville, MI; Elk Grove, IL; and Madison Heights, MI.
FluidTech is a distributor and manufacturer representative of precision mobile hydraulic components with two operations in Lenexa, KS. The company employs 49 people.
Hughes HiTech is an industrial automation supplier located in Clarence, NY. The company employs 22 people.
Hydro Air is a distributor of hydraulic and pneumatic components and systems. The company employs 60 people throughout its four locations in North Haven, CT; Raymond, ME; Horsham, PA; and Cranston, RI.
Power Systems is a distributor of hydraulic fluid power equipment, such as pumps, valves, gearboxes, differentials, hydrostatic transmissions and motors. The company employs 62 people at its facilities in Ankeny, IA; Chanhassen, MN; Tea, SD; and Richfield, WI.
About Applied Industrial Technologies
With more than 445 facilities and 4,600 employee-associates across North America, Applied Industrial Technologies is an industrial distributor that offers more than 3 million parts critical to the operations of MRO and OEM customers in virtually every industry. In addition, Applied provides engineering, design and systems integration for industrial and fluid power applications, as well as customized mechanical, fabricated rubber and fluid power shop services. For its fiscal year ended June 30, 2007, Applied posted sales of $2.0 billion. Applied can be visited on the Internet at http://www.applied.com/
This press release contains statements that are forward-looking, as that term is defined by the Securities and Exchange Commission in its rules, regulations and releases. Forward-looking statements are often identified by qualifiers such as "expect," "will" and similar expressions. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. Although Applied believes its expectations are based on reasonable assumptions by management, Applied cannot assure that the expectations reflected in this document will be achieved because they are subject to risks and uncertainties that are difficult to predict and may be outside of Applied's control. These risks and uncertainties include the possibility that the benefits anticipated from the transaction will not be fully realized, as well as the possibility the transaction may not close. All forward-looking statements are also based on current expectations regarding important risk factors including trends in the industrial sector of the economy, and other risk factors identified in Applied's most recent periodic report and other filings made with the Securities and Exchange Commission. Accordingly, actual results may differ materially from those expressed, projected or implied in the forward-looking statements, and the making of such statements should not be regarded as a representation by Applied or any other person that the results expressed therein will be achieved. Applied assumes no obligation to update publicly or revise any forward-looking statements, whether due to new information, or events, or otherwise, except as required by law.
