Company Press Release
SOURCE: Westinghouse Air Brake Company
Westinghouse Air Brake Company Announces Agreement To Purchase Rail Electronics Division of Rockwell International
WILMERDING, Pa., Aug. 18 /PRNewswire/ -- Westinghouse Air Brake Company (NYSE: WAB - news; WABCO) announced today that it had reached a definitive agreement with Rockwell Collins, Inc., a division of Rockwell International Corporation (NYSE: ROK - news), to purchase Rockwell's Railroad Electronics (RRE) division.
William E. Kassling, Chairman and CEO of WABCO said: "The acquisition of RRE moves WABCO forward significantly in our quest to become the leader in railroad safety equipment and technology applications. The future of railroads is high-tech, in electronics and electronics controls. WABCO is at the forefront of strategic thinking in the railroad safety arena. Adding RRE to our portfolio will allow us to move even faster to become the leader in providing the systems that will make smart trains a reality."
RRE designs and manufactures integrated communication control and monitoring systems for locomotives and railroad right-of-way applications. RRE includes Technical Service & Marketing (TSM), a leader in electronically controlled pneumatic braking systems for railcars. Rockwell entered the railroad electronics market in 1982 when it was contacted by the Burlington Northern Railroad to study the benefits of bringing electronic technology to railroad operations. In 1984, Rockwell developed the first Advanced Railroad Electronics System. Since then, Rockwell has developed a wide range of electronic systems to improve safety and productivity of rail system equipment and operations and counts among its customers virtually all of the major North American railroads.
"This very solid Rockwell business has found a great home as the newest of the Westinghouse Air Brake companies,'' said Rockwell Collins President John D. (Jack) Cosgrove. "I expect these two businesses will go forth as one very successful entity."
Dean P. Huntsinger, General Manager of RRE stated that "We are very familiar with WABCO and their high-quality operations and look forward to working with them to realize the significant benefits that will come from this combination."
The agreed-upon purchase price is $80 million; RRE's revenues for the nine months ending June 30, 1998 were $ 33.4 million, with the fiscal year 1998 revenues expected to approximate $44.5 million.
Chairman and CEO William E. Kassling also stated: "The acquisition of RRE is the culmination of discussions that began some time ago. RRE adds complementary lines to our existing array of products as well as valuable technology in electronic braking and positive train control. This is a fast growing field, and we are excited about the synergies and opportunities from combining RRE with our existing electronics division. This represents a major milestone in building a world-class, electronics operation. We believe this effort will fuel future growth and profitability and eagerly anticipate completing the transaction and beginning the process."
"WABCO has established a tradition with customers of high quality, on-time delivery, superior value and responsive performance'' added Greg Davies, WABCO President and COO. "RRE has earned a similar reputation from its customers. We have been impressed by the quality of RRE's management and are enthusiastic to begin working with them to integrate these two compatible cultures. We are convinced this merger will create additional value for our mutual customers."
The pending acquisition is subject to review under the provisions of the Hart-Scott-Rodino Anti-Trust Improvement Act of 1976.
Westinghouse Air Brake Company is North America's largest manufacturer of value added equipment for locomotives, railway freight cars and passenger transit vehicles. The Company's products, which are sold to both the original equipment market and the aftermarket, are intended to enhance safety, improve productivity and reduce maintenance costs for its customers. The Company's products include electronic controls and monitors, air brakes, couplers, air conditioning, door controls, draft gears and brake shoes.
Rockwell is a global electronic controls and communications company with leadership positions in industrial automation, avionics and communications, and electronic commerce. In late June, Rockwell announced that it planned to spin off to shareowners its Semiconductor Systems business at calendar year end. Rockwell's continuing businesses will have projected fiscal 1998 sales of approximately $7 billion and 38,000 employees.
This press release contains various forward-looking statements that include assumptions about future operations and results. These statements are based on current expectations and are inherently subject to risks and uncertainties. They are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. The Company's Form 10-K for the year ended December 31, 1997, incorporated by reference herein, lists the factors that could cause actual results to differ materially from the forward- looking statements.
SOURCE: Westinghouse Air Brake Company