CLEVELAND, Dec. 22 /PRNewswire-FirstCall/ -- Hawk Corporation (Amex:
HWK) announced today that the Company has entered into a definitive
agreement to sell its precision components group for $90.1 million to an
entity formed by Saw Mill Capital Partners, L.P. of Briarcliff Manor, New
York. The purchase price will include approximately $89.4 million in cash
and the assumption of approximately $0.7 million in debt. The purchase
price is subject to adjustment based on the working capital of the
precision components segment on the closing date. Hawk's precision
components segment manufactures and sells powder metal precision components
and metal injection molded components used in industrial, consumer and
other applications.
(Logo: http://www.newscom.com/cgi-bin/prnh/20001129/HWKLOGO )
Ronald E. Weinberg, Chairman and CEO of Hawk stated, "We look forward
to focusing our financial resources and management attention on our
friction products and performance racing business segments. We feel that
there are rewarding growth opportunities with our existing customers and in
our global markets. It is an exciting time for the management of Hawk in
both our friction and racing groups. We are equally pleased to have
selected Saw Mill to be the acquirer of our precision components business
particularly in light of their plans to continue its growth strategies and
outstanding service to its customers."
Mr. Scott Budoff, a partner in Saw Mill Capital Partners, L.P. stated,
"With this acquisition, we look forward to continuing the strides made by
Hawk in the development of new technologies and growth strategies of the
precision components business in connection with a strong partnership with
the segment's current senior management group. The current management team
will remain with the business and we fully expect to make this a seamless
transition for the precision components customers and suppliers."
The sale is expected to close in the first quarter of 2007, subject to
regulatory approvals and standard closing conditions. Hawk intends to use
the proceeds of the transaction for growth opportunities in the Company's
friction products and performance racing segments either internally or
through acquisitions, to retire debt and for general corporate purposes,
including the possibility of a limited stock buy-back, the details of which
will be subsequently announced if Hawk determines to pursue a stock
buy-back. For 2007, the extent to which the transaction is dilutive or
accretive to earnings per share can not be definitely determined at this
time and will depend on the actual performance of the Company's friction
products and performance racing businesses, the timing and return on
investment of the proceeds of the sale, debt reductions and any possible
stock buy-backs.
Hawk expects that the precision components segment will be reflected as
a discontinued operation in the Company's December 31, 2006 financial
results.
Jefferies & Company, Inc. acted as financial advisor to Hawk in this
transaction.
The Company
Hawk Corporation is a leading worldwide supplier of highly engineered
products. Its friction products group is a leading supplier of friction
materials for brakes, clutches and transmissions used in airplanes, trucks,
construction and mining equipment, farm equipment, recreational and
performance automotive vehicles. Through its precision components group,
the Company is a leading supplier of powder metal and metal injected molded
components used in industrial, consumer and other applications, such as
pumps, motors and transmissions, lawn and garden equipment, appliances,
small hand tools and trucks. The Company's performance racing group
manufactures clutches and gearboxes for motorsport applications and
performance automotive markets. Headquartered in Cleveland, Ohio, Hawk has
approximately 1,800 employees at 17 manufacturing, research, sales and
administrative sites in 5 countries.
Forward-Looking Statements
This press release includes forward-looking statements regarding Hawk's
current expectations regarding the sales of its precision components
segment. These forward-looking statements are based upon management's
expectations and beliefs concerning future events. Forward-looking
statements are necessarily subject to risks, uncertainties and other
factors, many of which are outside the control of the Company that could
cause actual results to differ materially from such statements. Actual
results and events may differ significantly from those projected in the
forward-looking statements. Hawk cannot provide any assurance that the
transaction will be consummated within the agreed upon time frame, or at
all, or that the conditions to the completion of the transaction will be
satisfied. Reference is made to Hawk's filings with the Securities and
Exchange Commission, including its annual report on Form 10-K for the year
ended December 31, 2005, its quarterly reports on Form 10-Q, and other
periodic filings, for a description of factors that could cause actual
results to differ materially from those in the forward-looking statements.
Any forward-looking statement speaks only as of the date on which such
statement is made, and the Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information, future
events or otherwise.
Hawk Corporation is online at: http://www.hawkcorp.com
SOURCE Hawk Corporation
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http://www.hawkcorp.com
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CONTACT:
Ronald E. Weinberg, Chairman & CEO, or Joseph
J. Levanduski, CFO, both of Hawk Corporation, +1-216-861-3553
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