Pentair Completes Acquisition of WICOR Industries
GOLDEN VALLEY, Minnesota, August 2 /PRNewswire/ --
- Deal Creates USD$2 Billion Water Technology Business With Approximately 8,000 Employees Worldwide
Pentair, Inc. (NYSE: PNR), announced today that effective July 31, 2004, it completed the acquisition of WICOR Industries, a unit of Wisconsin Energy Corporation (NYSE: WEC), Milwaukee. Pentair's acquisition of WICOR, which manufactures water system, filtration and pool equipment products under the Sta-Rite, SHURflo and Hypro brands, has created a USD$2 billion water technology business with approximately 8,000 employees worldwide that will now be known as Pentair Water. Pentair, which financed the USD$850 million purchase (excluding purchase price adjustments and approximately USD$25 million of assumed debt) through available and committed lines of credit, expects the acquisition to be accretive to earnings in the first 12 months of ownership.
"This transaction marks a significant milestone in that it doubles our water revenue and significantly expands our global market opportunities in an attractive market where Pentair has already established a leadership position," said Randall J. Hogan, chairman and chief executive officer of Pentair. "Nine years ago, Pentair identified water as an attractive market, based on its high growth and profit potential, and embarked on a remarkable journey that continues today."
Pentair has a record of success in managing the integration of acquired water businesses. Since 1995, the company has acquired 11 companies in the water arena, and each has increased sales and contributed to Pentair's earnings within the first 12 months of ownership.
"This acquisition presents significant opportunities for an estimated USD$30 million in net cost savings within the first full year," said David D. Harrison, executive vice president and chief financial officer of Pentair. "Our integration costs are expected to be incurred before the cost savings are actually realized, so most of the benefits will be reflected in our 2005 results."
Pentair and WICOR customers are expected to see immediate benefits as a result of the acquisition.
"Pentair Water offers customers several benefits," said Richard J. Cathcart, president and chief operating officer of Pentair Water. "With our combined size and capabilities, we will provide competitively priced, high quality products, increased customer responsiveness and accelerated development of innovative new products and industry-leading technical applications.
"The new geographic footprint of Pentair Water allows us to increase our global reach. Our mission -- to deliver innovative products and systems for the movement, treatment, storage and enjoyment of safe, clean water -- transcends borders, as does our business," continued Cathcart.
Since the announcement of the acquisition in February 2004, 14 integration planning teams consisting of more than 90 WICOR and Pentair employees developed a comprehensive integration framework that will be implemented across the businesses, beginning today. This new framework reflects contributions from both organizations, which were carefully considered throughout the process.
"The focus of our planning process was to build on the strengths of our complementary organizations so that we could hit the ground running when the transaction was complete," said Cathcart. "At the same time, one of our highest priorities was to maintain our current business momentum. With the commitment and contribution of our employees, we've been able to do just that."
Pentair Water will be the largest business group within Pentair, which remains committed to a diverse business mix. Pentair's Enclosures Group continues to deliver strong results. Second quarter sales were up 23 percent as compared to the same quarter in 2003, marking the tenth consecutive quarter of sequential margin improvement for the Group.
"We remain committed to the growth of our Enclosures Group, and we believe this business is also positioned to continue growing profitably," said Hogan.
About Pentair, Inc.
Pentair ( http://www.pentair.com ) is a diversified operating company headquartered in Minnesota. Its Pentair 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, serving industrial and electronic customers. The Tools Group, treated as a Discontinued Operation for reporting purposes beginning in the third quarter of 2004, markets innovative products under established brand names to professionals and do-it-yourself users. Pentair's 2003 revenues totaled USD$2.7 billion, with USD$1.6 billion from Continuing Operations. Including WICOR, Pentair employs 17,200 people in more than 50 locations around the world.
Any statements made about the company's anticipated financial results are forward-looking statements subject to risks and uncertainties such as the ability to complete the sale of the Tools Group on its expected timetable, the ability to obtain regulatory approvals of the sale of the Tools Group on anticipated terms and schedule, 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; continued economic growth; 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.
Contact Pentair: Mark Cain Tel.: +1 (763) 656-5278 E-mail: email@example.com
Web site: http://www.pentair.com
SOURCE Pentair, Inc.
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