Stewart & Stevenson Announces Agreement for the Sale of Its Engineered Products Division
29 September 2005 - 8:30AM
PR Newswire (US)
HOUSTON, Sept. 28 /PRNewswire-FirstCall/ -- Stewart & Stevenson
Services, Inc. (NYSE:SVC) announced today that the company has
entered into a definitive agreement to sell substantially all of
the operating assets of its Engineered Products Division to Hushang
Ansary, a prominent Houston oil industry entrepreneur and
philanthropist, for cash consideration of approximately $60 million
subject to adjustment based on assets delivered at closing. Max L.
Lukens, Stewart & Stevenson's President and Chief Executive
Officer, stated, "We are pleased to have entered into this
agreement with Mr. Ansary. Mark Whitman and his team have made
significant progress in improving this business as reflected in the
division's recent operating results and current production backlog.
However, our strategic review of each of our businesses led us to
the conclusion that the Engineered Products segment was not core to
the long-term direction of the company. We are confident that the
highly dedicated management and employees of this segment will
continue to make their valuable contributions under its new
ownership, and we anticipate a smooth transition and a timely
closing." The Engineered Products segment is a leader in the well
servicing industry and provides a wide array of equipment and
services for the oil industry. The company's Well Servicing
Products group has been manufacturing oilfield equipment for over
five decades and is a world leader in providing fracturing
equipment. Its Utility Equipment Division designs and manufactures
Rail King mobile railcar movers, which support various switching
operations throughout North America and manufactures off-road
seismic vehicles on a contract basis. The sale is expected to close
within 45 days subject to regulatory approvals. The Engineered
Products segment will be reflected as a discontinued operation in
Stewart & Stevenson's third quarter 2005 financial results. The
company will retain certain assets and liabilities of the business
that have been excluded from the sale and will comment further
regarding this transaction at its upcoming third quarter conference
call. Parks Paton Hoepfl & Brown, a Houston-based energy
investment banking firm, served as financial advisor to the company
( http://www.pphb.com/ ). Stewart & Stevenson Services, Inc.,
founded in 1902, is a billion-dollar company that manufactures,
distributes, and provides service for a wide range of industrial
products and diesel-powered equipment to key industries worldwide,
including power generation, defense, marine, petroleum and
transportation. For more information on Stewart & Stevenson
visit http://www.ssss.com/ . This press release contains
forward-looking statements that are based on management's current
expectations, estimates, and projections. These statements are not
guarantees of future performance and involve a number of risks,
uncertainties and assumptions and are made pursuant to the Safe
Harbor Provisions of the Private Securities Litigation Reform Act
of 1995. Many factors, including those discussed more fully
elsewhere in this release and in the company's filings with the
Securities and Exchange Commission, particularly its latest annual
report on Form 10-K, as well as others, could cause results to
differ materially from those stated. These factors include, but are
not limited to, risks of dependence on government and failure to
obtain new government contracts, inherent risks of government
contracts, risks of supply interruptions to Tactical Vehicle
Systems segment, risks associated with Distributed Energy Solutions
segment, risks of fixed-price contracts, risks as to rising steel
prices, risks as to cost controls, risks of general economic
conditions, risks of oil and gas industry economic conditions,
risks as to distributorships, risks as to licenses, risk of
competition, risks relating to technology, risks as to terrorist
attacks on the U.S. and their impact on the U.S. economy, risks
relating to personnel, risks of claims and litigation, risks of
product defects, risks as to foreign sales and global trade
matters, risks as to acquisitions and restructuring activities,
risks as to currency fluctuations, risks as to environmental and
safety matters, and credit risks all as more specifically outlined
in the company's latest annual report on Form 10-K. In addition,
such forward-looking statements could be affected by general
industry and market conditions and growth rates, general domestic
and international conditions including interest rates, inflation
and currency exchange rates and other future factors. Actual
outcomes and results may differ materially from what is expressed
or forecasted in such forward- looking statements. DATASOURCE:
Stewart & Stevenson Services, Inc. CONTACT: John Simmons, Sr.
V.P., CFO of Stewart & Stevenson Services, Inc.,
+1-713-868-7700 Web site: http://www.ssss.com/ http://www.pphb.com/
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