Kinetek has four facilities in China with superior engineering and sourcing capabilities, which are expected to enable the Company to accelerate its ACIM business growth strategy in China and offer cost-competitive products manufactured in China in other commercial motor markets. Furthermore, by taking advantage of Kinetek's network in India developed through its successful elevator motor business, the Company also intends to seek to achieve synergy from sales of its existing commercial motor products in the fast-growing Indian market.
The Company expects that the acquisition of Kinetek will result in a positive impact on the Company's sales and profits on a group-wide basis.
|(1) Information on Kinetek|
|Company Name:||Kinetek Group Inc.|
|Headquarters:||Deerfield, Illinois, United States|
|Year of Establishment:||1996|
|Principal Places of Business:||24 facilities (including 19 design centers) (14 in the U.S., 2 in Mexico, 4 in Italy, and 4 in China)|
|Principal Businesses:||Manufacture and design of custom-engineered electric motors, gear-motors, gearing, electronic controls, system solutions, and elevator control products|
|Sales in Fiscal Year 2011:||US$400 million|
|Assets as of December 31, 2011:||Current Assets: US$224 million|
|Fixed Assets: US$160 million|
|(2) Overview of Acquisition of Kinetek|
|Consideration:||The consideration for the transaction is expected to be paid in cash.|
|Method of Settlement and Financing:||The transaction is expected to be funded by cash on hand and/or debt financing (but there is no plan for capital increase).|
|Transaction Structure:||The Company has established a holding company ("Hold Co.") and a merger subsidiary in Delaware, which subsidiary will be merged into Kinetek through a reverse triangular merger. Following the merger, Kinetek will be the surviving company and a 100% subsidiary of Hold Co.|
|Transaction Schedule:||The closing of the transaction is currently expected to be completed in early November 2012, subject to required regulatory approvals and other factors.|
|(3) Information on the Seller|
|Name:||The Resolute Fund, L.P.|
|Address:||New York, New York, United States|
|Representative:||The Jordan Company, L.P.|
|Type of Business:||Management of private equity funds|
|Relationship between the Company and the Seller:||None of the Company and its affiliates has any direct or indirect investments in The Resolute Fund L.P. In addition, no capital, personnel or business relationship exists between any of the Company or its affiliates and the investors of The Resolute Fund L.P. (including its sponsors).|
3. Objective of acquiring Avtron — Aiming to make a full-scale entry into the North American industrial automation market in order to enhance synergies with ASI
Through the acquisition of Avtron, the Company seeks to strengthen NMC's and ASI's industrial motor and automation solutions businesses in North America and accelerates the Company's strategy to achieve synergy with ASI. In particular, Avtron's rich system engineering resources and experience, together with the customer relationships Avtron has established, are expected to enhance the Company's automation solution capabilities in North America and contribute to the Company's success in achieving business synergies between the Company and ASI.