ITT INDUSTRIES ITT Industries, Inc.
Automotive 4 West Red Oak Lane
Defense & Electronics White Plains, NY 10604
Fluid Technology Tel: (914) 641-2000
Fax: (914) 696-2950
Contact: Thomas R. Martin
For Immediate Release 914-641-2157
- --------------------- Ralph Allen
914-641-2030
ITT Industries and Goulds Pumps, Inc. Agree to $815 Million Cash Merger
--Company Will Be World's Largest Producer of Pumps--
White Plains, NY, April 21, 1997--ITT Industries, Inc. (NYSE:IIN)
and Goulds Pumps, Incorporated (NASDAQ:GULD) announced today that both
companies' boards of directors have approved a definitive agreement
under which ITT Industries will acquire Goulds for $37 a share or
approximately $815 million in cash, plus assumption of $119 million
of Goulds' debt. Under the agreement, a cash tender offer will be
commenced by a wholly-owned subsidiary of ITT Industries no later
than April 25, 1997 to acquire all of the outstanding shares of Goulds.
The tender offer will be subject to the valid tender of Goulds'
shares representing a majority of the voting power of Goulds, the expiration
of waiting periods under applicable antitrust and competition laws, and other
customary closing conditions. The tender offer is expected to be completed
in June.
"This combination will create the world's largest pump producer and
contribute significant efficiencies for both growth and cost improvement,"
said Travis Engen, chairman president and chief executive of ITT Industries.
"It increases our participation in one of our most profitable and fastest-
growing business segments. Once the acquisition is completed, our fluid
technology business will represent more than 20 percent of sales and over 25
percent of operating income, creating a global leader in a growing industry
that is beginning to consolidate. We expect the acquisition to enhance
earnings growth, with an accretive impact in its first full year and
significant contributions thereafter. This transaction is the most dramatic
step to date in our long-term strategy of building shareholder value."
"We are pleased that ITT Industries recognizes Goulds' proud
history, our strong name and many gains we have recently achieved," said
Goulds' chairman and chief executive officer, Thomas C. McDermott. "Goulds
and ITT Industries will be an important combination. We look forward to
working with ITT Industries' management team in taking full advantage of the
opportunities created through our combined capabilities."
Benefits for Growth and Cost Improvement
"This is a superb fit," Mr. Engen emphasized. "On the revenue
side, the products of ITT Industries' fluid technology business and Goulds
complement each other perfectly. For example, Goulds is one of the leading
producers of pumps for the industrial sector while ITT Industries is a world
leader in submersible pumps for municipal water treatment worldwide. The
cost benefits available in this combination flow from greater economies in
purchasing, manufacturing, marketing and sales, R&D and support functions.
"In addition, there are important geographic efficiencies,
especially in some of the world's fastest growing markets," Mr. Engen said.
"For instance, in the Pacific Rim, ITT Industries' distribution points in
Australia, New Zealand, Vietnam and Central Asian republics, are complemented
by Goulds' distribution in The Philippines, Korea and Thailand. We both have
operations in China, Taiwan, Singapore, Malaysia and Indonesia. In Latin
America, our operations in Chile, Argentina and Brazil will be enhanced by
Goulds' presence in Mexico and Venezuela.
"We are bringing together two proven leaders in their respective
segments of the fluid products industry serving more than 130 nations. The
industry's growth and profit potential is most promising in the developing
world, where the combined company will have access to the full range of
infrastructure-related and industrial markets," Mr. Engen added.
"Together we will focus on continuing to improve operations and
serving customers better and more efficiently through our global distribution
networks. The fluid businesses of ITT Industries and Goulds will accelerate
their progress in complementary business sectors," said Mr. Engen.
Goulds Pumps, Inc. is a leading worldwide supplier of industrial,
residential and commercial pumps, parts and accessories. Headquartered in
Fairport, New York, the company had 1996 revenues of $774 million and employs
over 5,200 people throughout the world. The company has a respected position
in a number of process industries and is a major supplier to engineering
contractors around the world. Goulds is also the world's leading
manufacturer of residential well-water pump systems.
ITT Industries' fluid technology business specializes in the
manufacture of pumps, valves, heat exchangers and related equipment used to
move, measure and control fluids. With 1996 sales of $1.3 billion in the
fluid technology segment, the company provides products serving markets that
include wastewater treatment, chemical processing, construction, bio-
pharmaceutical, aerospace, and general industry. With sales offices in over
100 countries, ITT Fluid Technology is growing rapidly in emerging markets
around the globe. The company's brand names include Flygt, Bell and Gossett,
A-C Pump, Richter and Jabsco.
ITT Industries (www.ittind.com) is a leading global diversified
manufacturing company, with 1996 sales of $8.4 billion dollars from its three
primary business segments, fluid technology, automotive, and defense and
electronics. ITT Industries' automotive business is one of the world's
largest independent suppliers of systems and components to automotive
manufacturers. In the defense and electronics area, ITT Industries is a
leader in the design, manufacture and support of high technology electronic
systems and components for defense and commerical markets. In addition to
the New York Stock Exchange, ITT Industries' stock is traded under the symbol
("IIN") on the Midwest, Pacific, London, Frankfurt and Paris exchanges.
NOTE TO EDITORS: THIS IS ITT INDUSTRIES (NYSE:IIN) NOT ITT CORPORATION
(NYSE:ITT). ANY SHORTHAND REFERENCE TO ITT WILL BE INCORRECT.