Tecumseh Products Company Announces Agreement to Sell the Majority of Its Electrical Components Operations to Regal Beloit Corporation
TECUMSEH, Mich., July 3 -- Tecumseh Products Company (Nasdaq: TECUA; TECUB) ("Tecumseh" or the "Company") today announced that it has signed an agreement with Regal Beloit Corporation (NYSE:RBC), to sell to Regal Beloit the majority of Tecumseh's Electrical Components business operations for $220 million in cash, subject to customary adjustments at closing. The operations to be sold, principally composed of the Residential & Commercial Motors and Asia Pacific divisions of Tecumseh's Fasco business unit, accounted for about 70% of Electrical Components sales in 2006. Tecumseh will use the proceeds of the transaction to pay off the debt associated with Tecumseh's second lien credit agreement as well as a substantial portion of its outstanding first lien debt.
James J. Bonsall, Tecumseh's President and Chief Operating Officer, said: "This is another important step in our ongoing efforts to reduce the Company's debt, sharpen its strategic focus, and improve its financial performance. Regal Beloit Corporation, as a worldwide leader in electrical motion control products, will be well positioned to further develop and grow these businesses as part of its overall product portfolio."
Completion of the transaction, which is subject to regulatory approval by the Federal Trade Commission and other customary closing conditions, is currently expected to occur in the third calendar quarter.
Rothschild Inc. served as the financial advisor to Tecumseh.
About Tecumseh Products Company
Tecumseh Products Company is a full-line independent global manufacturer of hermetic compressors for residential and commercial refrigerators, freezers, water coolers, dehumidifiers, window air conditioning units and residential and commercial central system air conditioners and heat pumps; gasoline engines and power train for lawn mowers, lawn and garden tractors, garden tillers, string trimmers, snow throwers, industrial and agricultural applications and recreational vehicles; and electric motors and components, including AC and DC motors, blowers, gear motors and linear actuators for a wide variety of industrial and consumer applications across a broad range of industries.
About Regal Beloit Corporation
Regal Beloit Corporation is a leading manufacturer of mechanical and electrical motion control and power generation products serving markets throughout the world. Regal Beloit has manufacturing, sales and service facilities throughout the United States, Canada, Mexico, Europe and Asia.
Teresa Hess
Director, Investor Relations
Tecumseh Products Company
517-423-8455
teresa.hess@tecumseh.com
Source: Tecumseh Products Company
Web site: http://www.tecumseh.com/
http://tecumseh.mediaroom.com/
