Tecumseh Products Company Announces the Sale of the Majority of Its Electrical Components Operations to Regal Beloit Corporation
TECUMSEH, Mich., Aug. 31 -- Tecumseh Products Company (NASDAQ:TECUA)(NASDAQ:TECUB) ("Tecumseh" or the "Company") today announced that it has completed its previously announced sale transaction with Regal Beloit Corporation (NYSE:RBC), selling Regal Beloit the majority of Tecumseh's Electrical Components business operations for $220 million in cash. The gross selling price was reduced at closing to account for amounts held in escrow pending resolution of working capital and warranty adjustments. The operations sold included the Residential & Commercial Motors and Asia Pacific divisions of Tecumseh's Fasco business unit, which accounted for about 70% of Electrical Components sales in 2006.
Tecumseh has used the proceeds of the transaction to pay in full the debt associated with its second lien credit agreement as well as the majority of its outstanding first lien debt.
Ed Buker, Tecumseh's Chief Executive Officer, said: "The completion of this sale transaction is an important element of our ongoing initiatives to improve our liquidity and strengthen our balance sheet, and enhances our ability to focus on our core businesses and improve our financial performance."
Effective with the closing of the transaction, Regal Beloit Corporation assumes ownership of the Fasco name. The businesses retained by Tecumseh that formerly operated under the Fasco name, including the Automotive & Specialty division, will now conduct business as "Von Weise USA, Inc." in the U.S., "TPC Motores de Mexico, S. de R.L. de C.V." in Mexico and "Von Weise of Canada Company" in Canada. These divisions, while continuing to operate, have been classified by Tecumseh as held for sale.
Rothschild Inc. served as 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; and gasoline engines and power train for snow throwers, industrial and agricultural applications and recreational vehicles.
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.
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Source: Tecumseh Products Company
Web site: www.tecumseh.com/
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