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© pengyou93 dreamstime.com Electronics Production | August 11, 2015

Johnson Electric to Acquire Stackpole International

Johnson Electric Holdings Limited today announced that it has agreed to acquire the Stackpole International group of companies, a leading supplier of engine and transmission pumps and powder metal components, primarily for automotive applications.
Stackpole, headquartered in Ontario, Canada, has a 109-year history as a supplier of components to the automotive industry. It employs over 2,000 individuals across a global operating footprint that includes nine manufacturing facilities located in North America, Europe and Asia. Its blue-chip customer base is comprised mainly of the automotive original equipment manufacturers and their Tier 1 suppliers.

Dr. Patrick Wang, Johnson Electric's Chairman and Chief Executive, commented:

"We identified pumps and highly-engineered components as strategic priorities for Johnson Electric to strengthen our position as a supplier to key engine and transmission applications that contribute to improved fuel economy and reduced emissions. Acquiring Stackpole's oil pump technology and powder metal expertise is an excellent fit that will enable us to provide integrated motorised pump solutions to customers in a rapidly growing market segment within the automotive industry. In addition, the acquisition will significantly increase our exposure to the North American automotive market which is presently experiencing strong demand, as well as provide attractive longer term growth platforms in Europe and Asia."

Johnson Electric has agreed to acquire Stackpole in an all-cash transaction that values Stackpole at C$800 million on an enterprise value basis. Johnson Electric will finance the acquisition with a combination of its current cash balances and proceeds from existing revolving credit facilities.

In conjunction with the transaction, Stackpole's existing high-yield debt will be retired. In addition to working capital and other customary adjustments, Johnson Electric has agreed to make a contingent payment of up to C$12.75 million, subject to the period elapsed between signing and closing. Subject to these additions and adjustments, it is estimated that the total consideration payable by Johnson Electric (including costs associated with the planned early retirement of Stackpole's high-yield debt) could be up to C$867 million (equivalent to approximately US$659 million).

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