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Snap-on Buys Proquest Unit

It sees the deal adding to earnings.
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Snap-on (SNA) - Get Snap-on Incorporated Report agreed to acquire ProQuest's (PQE) Business Solutions unit for $480 million in cash.

Kenosha, Wis.-based Snap-on said the business had revenue for the last 12 months of $185 million. It helps original equipment manufacturers and their dealers enhance their service operations.

"This is a compelling strategic transaction that affords exciting growth opportunities for our customers, associates and shareholders," said CEO Jack D. Michaels. "Our Diagnostics and Information Group has successfully built a solid financial and operating platform and has earned the right to grow by acquisition. This acquisition should further leverage that strength. ProQuest Business Solutions' ability to consolidate and transform complex manufacturer data from disparate sources into cohesive, integrated and highly customized systems makes it an important addition to our Diagnostics and Information Group. By integrating our complementary capabilities, we believe Snap-on will be uniquely positioned to add value for global OEMs and enhance the productivity and profitability of their dealerships.

Snap-on expects the transaction to be accretive to earnings per shareand cash flow in early 2007.

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ProQuest will use most of the proceeds from the sale to pay down outstanding debt. The company has also entered into a waiver extension agreement with its current lender group, under which the lenders have agreed to extend the timeframe for refinancing the company's remaining debt through March 15, 2007.

Snap-on intends to fund the transaction through a combination of cash and borrowings under existing facilities. Snap-on expects its consolidated cash flow available for the repayment of acquisition indebtedness to be $100 million or more annually.

Snap-on expects it will continue its regular cash quarterly dividend of 27 cents per share.

Proquest continues to work with its auditors to complete its accounting review and restate its financials.