Timken in process of acquiring Torrington
Canton, OH -- Nov. 25, 2002 -- The Timken Company, a producer of bearings and alloy steel, reached an agreement las...
Canton, OH — Nov. 25, 2002 — The Timken Company, a producer of bearings and alloy steel, reached an agreement last month with Ingersoll-Rand Co. Ltd. of Woodcliff Lake, N.J., to acquire its Torrington subsidiary, a producer of needle roller, heavy-duty roller and ball bearings and motion control components and assemblies. The deal is for $700 million in cash and $140 million in Timken shares (all figures in US dollars).
Upon completion of the acquisition, Timken will be the world’s third largest bearings company with about $3.6 billion in annual revenues, global leadership positions in the needle and tapered roller bearing and alloy steel industries, and operations on six continents.
The transaction, which is subject to anti-trust clearance, successful completion of debt and equity financing, and customary closing conditions, is expected to close during the first quarter of 2003.
The acquisition of Torrington, which had 2001 sales totalling $1.1 billion, significantly broadens Timken’s existing portfolio of automotive and industrial bearings-based products and service solutions and expands the global size and scope of Timken’s business. Timken and Torrington each have more than 100 years of operating experience in anti-friction products.
Torrington’s cylindrical, spherical, needle roller and ball bearings and customized engineering solutions provide a strong complement to Timken’s leading tapered roller bearings and alloy steel products.
Timken expects to achieve annual cost savings of around $80 million to be fully phased in by the end of 2005, with approximately $20 million realized in the first year. This is in addition to a previously announced $80 million in annualized savings that Timken expects to achieve by the end of 2002 from a new manufacturing strategy launched last year.
The new savings are expected to come from economies of scale, elimination of duplicate costs, improved operating efficiencies, and enhanced productivity.
W. R. Timken, Jr., chairman, said, “We are excited about combining Timken and Torrington, two of the most respected names in manufacturing, to create a stronger bearings products and solutions company that will give us a larger platform to increase shareholder wealth and better serve our customers.
“By acquiring Torrington, we significantly strengthen our presence in Europe, Asia and Latin America and other emerging markets, which will enable us to compete more effectively, not only with established worldwide firms, but also with growing regional competitors.”
James W. Griffith, president and chief executive officer, said, “The acquisition of Torrington will position Timken as a global leader in three complementary product and service lines: tapered roller bearings, needle roller bearings and alloy steels.
“The addition of Torrington’s higher-margin, customized bearings solutions business will significantly strengthen Timken’s existing automotive segment and will provide Timken with accelerated growth opportunities in a dynamic area for innovation — power train systems,” he said.
The combined company’s engineering expertise, Griffith added, “will enable our customers to benefit from innovative new products and leading-edge components to further enhance their competitive positions.”