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Hamworthy KSE divests non-core units
Pump Industry Analyst
HAMWORTHY KSE DIVESTS NON-CORE UNITS
remanufactured units to establish an exchange program to meet specific customer needs.
The Hamworthy KSE Group has sold its starting air compressors and Schilling rudders businesses to the German marine equipment manufacturer Hatlapa Uetersener Maschinenfabrik GmbH & Co. About 20 employees of the two businesses will remain at the Hamworthy KSE Poole site in the UK employed by Hatlapa subsidiaries. Production of starting air compressors will be progressively transferred to the new owner’s site at Uetersener near Hamburg, to complement Hatlapa’s existing ranges of compressors. The sale of the two businesses is part of a small divestment programme announced by Hamworthy KSE in August 2002 affecting four smaller product lines. The district heating pump business was sold to Grundfos in November 2002 (see Pump Industry Analyst, December 2002). These disposals will enable the company to focus on its core businesses of sewage treatment systems, pumps and pump systems, and gas handling systems, all of which are currently growing strongly with the introduction of new products and technologies.
HANOVER COMPRESSOR TO SELL PUMPS BUSINESS
GIW OPENS REGEN CENTRE US slurry pump specialist GIW Industries has opened its first OEM service centre at its Grovetown, Georgia headquarters. The GIW REGEN Centre will specialize in servicing slurry pumps, offering a rebuild/reman/exchange programme. GIW will rebuild the customer’s assembly and upgrade as specified by the customer. The GIW remanufactured pumps will include only genuine OEM replacement parts. GIW will also use
Hanover Compressor is planning to sell its pump division during 2003. In the fourth quarter of 2002, Hanover Compressor recorded US$56.3 million in pre-tax unusual charges, including US$4.6 million in goodwill impairment related to the writedown of goodwill associated with the company’s pump division. Hanover Compressor’s pump range includes single and multistage centrifugal pumps (ANSI and API 610), triplex and quintuplex reciprocating pumps, screw and gear positive displacement pumps and chemical injection pumps.
MONO MOVES INTO CHINA Mono Pumps plans to establish a distribution network for its products throughout China. The company has appointed two new employees, who will work from the Beijing offices of Mono’s new parent company National Oilwell, to drive this effort.
TECUMSEH PRODUCTS FINALIZES FASCO FINANCING Tecumseh Products Co has completed the permanent financing of the FASCO Motors acquisition through the issuance of US$300 million in Senior Guaranteed Notes due 5 March 2011. The proceeds were used to repay a US$250 million temporary bridge credit facility, with the balance used to pay down amounts borrowed under
the company’s US$125 million revolving credit facility. The notes, which bear the coupon rate of 4.66%, are for a term of eight years from 5 March 2003, and call for a rateable principal amortization beginning at the end of year four.
GRACO TO BUY BACK SHARES FROM FOUNDING FAMILY Graco Inc has reached an agreement in principle with the company’s founding family to purchase 2.2 million shares of Graco common stock, at a price of US$24.89 per share, or a total of US$54.8 million. The shares will be purchased from David Koch, Graco’s former chairman and CEO who is retiring from the Graco board of directors on 6 May 2003, from his wife Barbara Koch, and from a family trust and family foundation. These shares will not be outstanding following the purchase, which will reduce the outstanding shares to approximately 45.4 million. The purchase price represents a discount of 5.5% from the average closing price of Graco stock over the ten trading days ending 7 March 2003. Graco intends to use current available cash to fund the stock purchase, which is expected to close by no later than 14 March 2003. The stock repurchase will not reduce the number of shares that may be purchased under the company’s current share repurchase program, as previously announced on 22 February 2002. Under that program, the company is authorized to purchase up to a total of 1.8 million shares of its outstanding common stock through the period ending 28 February 2004. The company has about 1.6 million shares remaining under the authorization. These amounts
have been adjusted to reflect the 3-for-2 split of common stock paid on 6 June 2002.
ITT REITERATES Q1, FULL YEAR GUIDANCE ITT Industries Inc is sticking with its earlier guidance of first quarter earnings per share of US$0.78-0.82, and full year EPS of US$3.70-3.90. Speaking at the recent Salomon Smith Barney Industrial Conference in New York City, chief financial officer David Anderson said the company remained confident in its ability to deliver earnings growth in a difficult environment. “We are sticking with our successful game plan, improving value for our customers through our ongoing Value-Based Six Sigma initiative, adding to our strong cores and continuing to deliver strong cash flow,” said Anderson.
HHI OUTLINES 2003 TARGETS Hyundai Heavy Industries’ Engine & Machinery Division is aiming to win US$650 million in orders during 2003, a 7.4% year-onyear increase. One of six divisions of HHI, HHI-EMD specializes in engines, marine equipment, diesel power plant, robotics systems, industrial pumps and advanced industrial machinery. Industrial pumps accounted for less than 10% of HHI’s Engine & Machinery Division sales in 2001. In the group’s business plan for 2003, HHI has set itself an overall order target of US$7.3 billion for 2003, and expects sales to reach Won8.3 trillion, a 2.3% increase year-on-year. The company has also increased this year’s planned R&D spend to Won117.9 billion, marking a 20.3% year-on-year increase on the Won98 billion spent in 2002.
13
NEWS
March 2003
HAMWORTHY KSE DIVESTS NON-CORE UNITS
remanufactured units to establish an exchange program to meet specific customer needs.
The Hamworthy KSE Group has sold its starting air compressors and Schilling rudders businesses to the German marine equipment manufacturer Hatlapa Uetersener Maschinenfabrik GmbH & Co. About 20 employees of the two businesses will remain at the Hamworthy KSE Poole site in the UK employed by Hatlapa subsidiaries. Production of starting air compressors will be progressively transferred to the new owner’s site at Uetersener near Hamburg, to complement Hatlapa’s existing ranges of compressors. The sale of the two businesses is part of a small divestment programme announced by Hamworthy KSE in August 2002 affecting four smaller product lines. The district heating pump business was sold to Grundfos in November 2002 (see Pump Industry Analyst, December 2002). These disposals will enable the company to focus on its core businesses of sewage treatment systems, pumps and pump systems, and gas handling systems, all of which are currently growing strongly with the introduction of new products and technologies.
HANOVER COMPRESSOR TO SELL PUMPS BUSINESS
GIW OPENS REGEN CENTRE US slurry pump specialist GIW Industries has opened its first OEM service centre at its Grovetown, Georgia headquarters. The GIW REGEN Centre will specialize in servicing slurry pumps, offering a rebuild/reman/exchange programme. GIW will rebuild the customer’s assembly and upgrade as specified by the customer. The GIW remanufactured pumps will include only genuine OEM replacement parts. GIW will also use
Hanover Compressor is planning to sell its pump division during 2003. In the fourth quarter of 2002, Hanover Compressor recorded US$56.3 million in pre-tax unusual charges, including US$4.6 million in goodwill impairment related to the writedown of goodwill associated with the company’s pump division. Hanover Compressor’s pump range includes single and multistage centrifugal pumps (ANSI and API 610), triplex and quintuplex reciprocating pumps, screw and gear positive displacement pumps and chemical injection pumps.
MONO MOVES INTO CHINA Mono Pumps plans to establish a distribution network for its products throughout China. The company has appointed two new employees, who will work from the Beijing offices of Mono’s new parent company National Oilwell, to drive this effort.
TECUMSEH PRODUCTS FINALIZES FASCO FINANCING Tecumseh Products Co has completed the permanent financing of the FASCO Motors acquisition through the issuance of US$300 million in Senior Guaranteed Notes due 5 March 2011. The proceeds were used to repay a US$250 million temporary bridge credit facility, with the balance used to pay down amounts borrowed under
the company’s US$125 million revolving credit facility. The notes, which bear the coupon rate of 4.66%, are for a term of eight years from 5 March 2003, and call for a rateable principal amortization beginning at the end of year four.
GRACO TO BUY BACK SHARES FROM FOUNDING FAMILY Graco Inc has reached an agreement in principle with the company’s founding family to purchase 2.2 million shares of Graco common stock, at a price of US$24.89 per share, or a total of US$54.8 million. The shares will be purchased from David Koch, Graco’s former chairman and CEO who is retiring from the Graco board of directors on 6 May 2003, from his wife Barbara Koch, and from a family trust and family foundation. These shares will not be outstanding following the purchase, which will reduce the outstanding shares to approximately 45.4 million. The purchase price represents a discount of 5.5% from the average closing price of Graco stock over the ten trading days ending 7 March 2003. Graco intends to use current available cash to fund the stock purchase, which is expected to close by no later than 14 March 2003. The stock repurchase will not reduce the number of shares that may be purchased under the company’s current share repurchase program, as previously announced on 22 February 2002. Under that program, the company is authorized to purchase up to a total of 1.8 million shares of its outstanding common stock through the period ending 28 February 2004. The company has about 1.6 million shares remaining under the authorization. These amounts
have been adjusted to reflect the 3-for-2 split of common stock paid on 6 June 2002.
ITT REITERATES Q1, FULL YEAR GUIDANCE ITT Industries Inc is sticking with its earlier guidance of first quarter earnings per share of US$0.78-0.82, and full year EPS of US$3.70-3.90. Speaking at the recent Salomon Smith Barney Industrial Conference in New York City, chief financial officer David Anderson said the company remained confident in its ability to deliver earnings growth in a difficult environment. “We are sticking with our successful game plan, improving value for our customers through our ongoing Value-Based Six Sigma initiative, adding to our strong cores and continuing to deliver strong cash flow,” said Anderson.
HHI OUTLINES 2003 TARGETS Hyundai Heavy Industries’ Engine & Machinery Division is aiming to win US$650 million in orders during 2003, a 7.4% year-onyear increase. One of six divisions of HHI, HHI-EMD specializes in engines, marine equipment, diesel power plant, robotics systems, industrial pumps and advanced industrial machinery. Industrial pumps accounted for less than 10% of HHI’s Engine & Machinery Division sales in 2001. In the group’s business plan for 2003, HHI has set itself an overall order target of US$7.3 billion for 2003, and expects sales to reach Won8.3 trillion, a 2.3% increase year-on-year. The company has also increased this year’s planned R&D spend to Won117.9 billion, marking a 20.3% year-on-year increase on the Won98 billion spent in 2002.
13
NEWS
March 2003