January 31, 2007 -- Belden (www.belden.com) has entered into a definitive agreement to purchase Hirschmann Automation and Control GmbH (HAC - www.hirschmann-ac.com), from HgCapital, a European private equity investor, for a cash purchase price of approximately $260 million. HAC is a supplier of Industrial Ethernet platforms and industrial connectivity products.
John Stroup, president and chief executive officer of Belden, commented, "The acquisition of Hirschmann is a major achievement in our pursuit to expand our business in desirable end-markets, beyond cable, to signal transmission solutions. In addition to having a broad portfolio of connectors for the industrial market, Hirschmann is the undisputed leader in the application of Industrial Ethernet solutions. We couldn't be more excited to have Hirschmann as part of the Belden family."
"Hirschmann has leveraged its knowledge of industrial automation into a leading position in digital communication for manufacturing and large-scale infrastructure projects," Stroup continued. "Industrial Ethernet is an open system that allows the integration of a wide variety of equipment and provides for an interface between the industrial network and the enterprise network. The adoption of Industrial Ethernet among our customers is in the early stages but is increasing rapidly because of these compelling advantages."
"In the short run," he continued, "we see a tremendous opportunity to use Belden's global reach to accelerate HAC's revenue growth in North America and Asia. In the long run, we expect to thoughtfully integrate the capabilities of Hirschmann and Belden to create products and services for the industrial market that are preferred worldwide. We continue to investigate opportunities that advance our presence in emerging geographies and expand our solutions beyond copper cable."
HAC is led by Reinhard Sitzmann, chief executive officer, who will continue in that role. The company has its headquarters in Neckartenzlingen, Germany, two production locations in Germany, and three manufacturing joint ventures in China. In addition to its Industrial Ethernet and connectivity product lines, HAC has a leading position in electronic control and safety systems for cranes and other load-bearing equipment. HAC had 2006 revenues of approximately $250 million and employs 750 associates.
Sitzmann said, "HAC and Belden have highly complementary products and market positions. Belden will be able to strengthen HAC's market presence in North America and Asia. We welcome this combination with Belden and look forward to a creative and dynamic future."
Apart from the cash purchase price and as part of the consideration for the acquisition, Belden will be responsible for certain obligations, including pension liabilities, of approximately $60 million, to be funded in future years.
The companies anticipate the transaction to close in approximately 45 days. Belden expects that the transaction will be accretive to 2007 earnings.
