PLYMOUTH, Mich., March 26 /PRNewswire/ -- Simpson Industries, Inc.
(Nasdaq: SMPS) and Cummins Engine Co., Inc. (NYSE: CUM) today announced they
have signed a letter of intent for Simpson to acquire the Vibration
Attenuation (VA) Division of Holset Engineering Company, Ltd., a subsidiary of
Cummins.
    The proposed transaction is subject to completion of due diligence, the
execution of a definitive purchase agreement and certain other conditions.  It
is presently anticipated that the purchase would be completed in the second
quarter.  Terms were not disclosed.
    "This opportunity provides a platform for Simpson to gain a significant
presence in Europe, South America and the Far East while expanding its product
range in Noise, Vibration and Harshness, a focus product line for Simpson,"
said Roy E. Parrott, President and Chief Executive Officer.  "The VA
Division's operations will complement Simpson's current business by broadening
its product range, customer base and geographic reach.  We are pleased with
the strategic fit and the opportunity to strengthen our relationship with
Cummins."
    Cummins President and Chief Operating Officer Tim Solso said, "While
vibration attenuation is an important technology, it is not strategic to our
operations.  In Simpson, we align ourselves with a high-technology partner
which specializes in the design and manufacture of these types of components.
This action is part of Cummins' ongoing restructuring effort to focus its
talent and resources on producing only those components which provide the
maximum opportunity to offer comparative advantage to its customers."
    Holset's VA Division supplies rubber dampers for light and medium-duty
engines and viscous dampers for heavy-duty diesel engine customers.  The
Division's manufacturing operations are located in England, France, Spain,
Mexico and Brazil.  The company is also a partner in joint ventures located in
India and Korea.  In addition to Cummins, current customers of the business
include RVI, Volvo, MAN, Peugeot, Scania, Renault, Kia Motors, Nissan, GM's
Opel and Ford's Jaguar.  Revenues for the Division were $67 million in 1996.
    Upon completion of the proposed transaction, Simpson expects to continue
the operations at all locations and to retain most of the current employees.
Simpson will also enter into a supply agreement and a technology agreement
with Cummins.
    Cummins, headquartered in Columbus, Indiana, is a leading worldwide
designer and manufacturer of diesel engines and related products.  These
engines provide power for customers in its key markets: automotive, power
generation, industrial and filtration.  The company reported record sales of
$5.3 billion in 1996.  Cummins' home page on the Internet can be found at
http://www.cummins.com.
    Simpson Industries supplies powertrain and chassis products to original
equipment manufacturers with current operations in North America and has long
been a key supplier to Cummins.  Simpson's products are focused in four
groups: noise, vibration and harshness; wheel-end and suspension; modular
engine assemblies and high-precision machined parts.  Simpson's North American
manufacturing units are located throughout the Midwest, as well as North
Carolina, Ontario and Mexico.

Link to this page: