CUNO to Acquire WTC Industries, Inc.
27 May 2004 - 7:02AM
PR Newswire (US)
CUNO to Acquire WTC Industries, Inc. MERIDEN, Conn., and EAGAN,
Minn., May 26 /PRNewswire-FirstCall/ -- CUNO Incorporated
(NASDAQ:CUNO) and WTC Industries, Inc. (OTC: WTCO) (BULLETIN BOARD:
WTCO) announced today that they have entered into a definitive
merger agreement under which CUNO will acquire WTC. WTC, through
its PentaPure, Incorporated operating subsidiary, manufactures
water filtration systems and replacement filter cartridges for
point-of-use applications, including residential refrigerators and
under-the-counter drinking water systems. WTC is based in Eagan, MN
and currently employs approximately 220 people. During 2003 WTC's
sales totaled $28.3 million and sales for the trailing twelve month
period (through its quarter ended April 2, 2004) totaled $33.8
million. The planned combination will increase CUNO's presence in
the point-of-use water filtration products business. Under the
terms of the transaction, which was approved by both companies'
boards of directors, WTC's stockholders will receive $39.87 in cash
for each WTC share outstanding. WTC option and warrant holders will
receive a cash payment based on the difference between $39.87 per
share and the exercise price of their options and warrants. CUNO
will also assume WTC's outstanding bank debt of approximately $9.5
million, resulting in a total transaction value of approximately
$110 million. CUNO plans to finance the acquisition with a
combination of existing cash and bank financing. The acquisition is
expected to be accretive for CUNO within the first twelve months of
ownership. The transaction, which is subject to the affirmative
vote of WTC's shareholders as well as the satisfaction of customary
conditions and applicable regulatory approvals, is expected to be
completed during the third quarter of CUNO's current fiscal year.
Commenting on the transaction, Mark G. Kachur, CUNO's Chairman and
Chief Executive Officer, said "The acquisition of WTC Industries
will broaden CUNO's product line, technology portfolio and customer
base and expand the Company's presence in the water filtration
business. WTC is an excellent strategic fit with our Potable Water
business, CUNO's largest and fastest growing business. Combining
CUNO's and WTC's capabilities and strengths in engineering,
innovative product development, customized manufacturing and highly
focused customer support should enable us to provide greater value
to our customers and shareholders. With the addition of WTC, we
expect our worldwide OMA sales (i.e. sales to OEMs, multi-level
marketers, and appliance manufacturers) to exceed $100 million in
fiscal 2005 and our future growth prospects in the water filtration
business will be significantly enhanced." WTC Industries' CEO James
Carbonari said, "In view of our rapid growth, capital needs and
opportunities in hand, we believe that this transaction is in the
best interests of our shareholders, customers and employees. We are
very excited about becoming part of CUNO, since culturally and
operationally CUNO and WTC are extremely compatible companies. This
strategic combination should enable us to leverage our respective
capabilities and talents in the water filtration business and grow
our business more effectively on a long term basis." Citigroup
Global Markets Inc. acted as financial advisor to CUNO and Robert
W. Baird & Co. acted as financial advisor to WTC. A conference
call for interested analysts and investors will be held tomorrow at
8:30 a.m. EDT. The call-in number is 1-888-423-3274. Alternatively,
visit us at http://www.cuno.com/investors for a live webcast of our
conference call. Also, visit http://www.cuno.com/ for additional
information about CUNO and http://www.pentapure.com/ for additional
information about WTC. About CUNO: CUNO is a world leader in the
design, manufacture and marketing of a comprehensive line of
filtration products for the separation, clarification and
purification of liquids and gases. CUNO's products, which include
proprietary depth filters and semi-permeable membrane filters, are
used in the potable water, healthcare, and fluid processing
markets. About WTC: WTC Industries, Inc. designs and manufactures
water filtration products for point-of-use applications. Caution
Concerning Forward Looking Statements: This release contains
forward-looking statements, including statements regarding the
anticipated timing of the transaction and possible performance of
the combined company after the transaction is completed. Such
statements reflect management's best judgment as of this date, but
they involve risks and uncertainties that could cause actual
results to differ materially from those presented. Factors that
could cause such differences include, without limitation, (1) the
possibility of customer, supplier or employee attrition or reaction
following this transaction; (2) the possibility that regulatory
approvals may be delayed or denied or that burdensome conditions
may be imposed in connection with such approvals; (3) failure to
fully realize the expected growth potential and cost savings from
the transaction; (4) lower than expected revenues following the
transaction; (5) problems or delays in integrating the two
companies; (6) the possibility of adverse changes in global,
national or local economic or monetary conditions; (7) competition
and change in the water filtration business; and (8) other factors
described in either CUNO's or WTC's recent filings with the
Securities and Exchange Commission. Those factors or others could
result, for example, in delay or termination of the transaction
discussed above. Readers should carefully consider those risks and
uncertainties in reading this release. Except as otherwise required
by law, CUNO and WTC disclaim any obligation to update any
forward-looking statements included herein to reflect future events
or developments. In connection with the proposed transaction, WTC
Industries will be filing proxy statements and other materials with
the Securities and Exchange Commission. Investors are urged to read
the proxy statement and these materials when they are available
because they contain important information. WTC Industries and its
officers and directors may be deemed to be participants in the
solicitation of proxies with respect to the proposed transaction.
Information regarding such individuals is included in WTC's
information statements and Annual Reports on Form 10-KSB previously
filed with the Securities and Exchange Commission, and in the proxy
statement relating to the merger when it becomes available.
Investors may obtain a free copy of the proxy statements and other
relevant documents when they become available as well as other
materials filed with the Securities and Exchange Commission
concerning WTC Industries and these individuals at the Securities
and Exchange Commission's website at http://www.sec.gov/. These
materials and other documents may also be obtained without charge
by contacting: WTC Industries, Inc, 1000 Apollo Road, Eagan
Minnesota 55121, Attn: Gregory P. Jensen. Contact Info: CUNO:
Frederick C. Flynn, Jr. 203/238-8847 WTC: Greg Jensen 651/554-3144
DATASOURCE: CUNO Incorporated CONTACT: Frederick C. Flynn, Jr. of
CUNO, +1-203-238-8847, ; or Greg Jensen of WTC, +1-651-554-3144,
Web site: http://www.cuno.com/ Company News On-Call:
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