Exhibit 99.1
[ROYAL APPLIANCE MFG. CO. LETTERHEAD]
TechTronic Industries To Acquire Royal Appliance Mfg. Co.
HONG KONG and CLEVELAND, Dec. 17 /PRNewswire-FirstCall/ -- TechTronic
Industries Company Limited ("TTI"), (HK: 669 U.S.ADR TTNDY) and Royal Appliance
Mfg. Co. (NYSE: RAM), today announced that they have entered into a definitive
agreement ("agreement") for the acquisition by TTI of Royal Appliance, an
innovative floor care company whose Dirt Devil(R) brand is among the market
leaders in North America. The agreement provides for Royal Appliance
shareholders to receive US$7.37 per share in cash, or a total purchase price of
approximately US$105 million.
Under the terms of the agreement, Royal Appliance will be merged with a
subsidiary of TTI which, following the completion of the merger, will operate as
a wholly owned subsidiary of TTI. The transaction is expected to close in March
of 2003. It is subject to, among other things, the expiration or termination of
the Hart-Scott-Rodino Act waiting period and approval by the shareholders of
both TTI and Royal Appliance. Royal Appliance was advised by NatCity
Investments, Inc. in connection with this transaction.
Through its brands such as RYOBI(R), HOMELITE(R) and VAX(R), TTI is a
leading supplier of home improvement products, including power tools, floor care
appliances, and lawn and garden equipment. For the 12 months ended 31 December,
2001 TTI generated revenue of US$784 million, and for the six months ended 30
June, 2002, TTI's sales increased 70.9% over the same period for the prior year
to US$508.9 million. Royal Appliance generated revenues of approximately US$400
million for the twelve months ended September 30, 2002.
Horst Pudwill, Chairman and Chief Executive of TTI, said, "The acquisition
of Royal represents another significant step in TTI's worldwide branding
strategy. This began with our purchase in 2000 of Ryobi North America's power
tool business followed by the acquisition of Ryobi's European and Australian
power tool and lawn and garden activities. In 2001 we acquired the Homelite lawn
and garden products division from John Deere.
"By integrating forward from our strong position as a high quality, low
cost original equipment manufacturer to become a brand marketing company in key
markets worldwide, we have created additional business opportunities at both the
manufacturing and retail distribution levels. The acquisition of Royal extends
this strategy into floor care and greatly strengthens TTI's product development,
marketing and logistics capabilities in this industry sector, while adding
several important brand names such as Dirt Devil(R) to our portfolio.
"We are pleased that Royal will continue to be led by its experienced
management team including Michael Merriman, who will remain its Chief Executive
Officer. Additionally, Royal's proven product development track record,
marketing expertise, and strong relationships with large US and Canadian
retailers will strengthen our North American infrastructure. Royal's
state-of-the-art distribution facilities in Cleveland, Ohio and Ontario,
California complement our RYOBI/Homelite(R) US facility in Anderson, South
Carolina, providing superior logistics support to our retail customers. This
strong foundation will enable us to better serve, partner and grow with these
important retailers in multiple product categories."
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R. Louis Schneeberger, Chairman of Royal, stated, "We are pleased that TTI
has made this 'all cash' offer to our shareholders. This merger will also
strengthen Royal's product development capabilities for its retail partners and
provide growth opportunities for our employees. Royal's board of directors has
unanimously approved the proposed transaction. Additionally, our two largest
shareholders, who are currently represented on Royal's board of directors and
own approximately 31% of Royal's outstanding stock, have approved the
transaction and have entered into voting agreements with TTI."
Michael J. Merriman, Chief Executive Officer of Royal, stated, "To remain
competitive in today's consolidating retail environment with more limited shelf
space, a successful supplier needs to achieve economies by offering multiple
brands in multiple product categories through a highly efficient global supply
chain. TTI has been a responsive and innovative OEM supplier to us since 1995.
We have worked together to accelerate our new product development process and
have successfully implemented six sigma quality initiatives. We will now be able
to offer our retail customers a fully integrated global supply chain with 24/7
new product design capability and collaboration. Integration with TTI's
capabilities will combine Royal's product innovation and marketing with TTI's
cost leadership, resulting in significant competitive advantage."
About the Companies:
Founded in 1985, TTI is a world leading manufacturer and marketer of
innovative home improvement power products, floor care appliances and electronic
measuring products. TTI's brands include Ryobi(R) power tools, Homelite(R)
outdoor products, and VAX(R) floor care appliances. Following its effective
partnership strategy with principal volume retailers and reputable brand name
companies, TTI has achieved continuous double-digit growth since listing on the
Hong Kong Stock Exchange in 1990. Web site address: www.tti.com.hk
Royal Appliance primarily develops, assembles, sources and markets vacuum
cleaners and other cleaning appliances for home and commercial use under the
Dirt Devil(R) and Royal(R) brand names, as well as the Telezapper(R), a device
that helps reduce computer-dialed telemarketing calls. The Company's executive
offices are located at 7005 Cochran Road, Glenwillow, Ohio 44139. Web site
addresses: www.royalappliance.com, www.dirtdevil.com, www.telezapper.com
Forward-Looking Statements:
Forward-looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. Potential risks and uncertainties
related to Royal and the proposed merger include, but are not limited to:
regulatory approvals and satisfaction of conditions precedent to the proposed
merger; the financial strength of the retail industry particularly in the major
mass retail channel; the impact of Kmart's bankruptcy filing on Royal's future
sales and earnings; the competitive pricing and aggressive product development
environment within the floor care industry; the impact of private-label programs
by mass retailers; the cost and effectiveness of planned advertising, marketing
and promotional campaigns; the success at retail and the continued acceptance by
consumers of Royal's new products, the dependence upon Royal's ability to
continue to successfully develop and introduce innovative products; the
uncertainty of Royal's global supply chain and suppliers to continuously supply
sourced finished goods and component parts; and general business an economic
conditions.
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Further Information
For further details of the merger transaction, please refer to TTI's major
transaction announcement, which can be downloaded from TTI's website:
www.tti.com.hk or the Hong Kong Stock Exchange website: www.hkex.com.hk after
the clearance of the announcement by the Stock Exchange.
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SOURCE Royal Appliance Mfg. Co.
-0- 12/17/2002
/CONTACT: David Butts of TechTronic Industries Company Limited,
+852-2402-6888; or Deborah Holtkamp of Royal Appliance Mfg. Co.,
+1-440-996-2128; or Robert Falls of Robert Falls & Company - Public Relations,
+1-216-696-0229/
/Web site: http://www.dirtdevil.com
http://www.tti.com.hk
http://www.royalappliance.com
http://www.telezapper.com
http://www.hkex.com.hk/
(RAM TTNDY)
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