I N D U S T R Y '

T E X T R O N E X P A N D S FLUID H A N D L I N G

P R O D U C T S B U S I N E S S

Textron Inc has acquired LCI Corporation Interna- tional's Fluid Systems Divi- sion (FSD), a manufacturer and assembler of gear pumps, filtration systems and accessory equipment for the polymer, extrusion and industrial p u m p industry.

LCI is a subsidiary of Pnemnafil Corporation, which in turn is owned by Beacon Industrial Group LLC. Based in Charlotte, North Carolina, FSD will become part of Maag Pump Systems Textron lnc, a division of Textron's Fluid Handling Products busi- ness. FSD had 1998 revenues of approximately US$12 mil- lion. Maag Pump Systems Textron manufactures and designs gear pumps and sys- tems for the extrusion, poly- mer, industrial and com- pounding industries. The company employs more than 270 people worldwide and has operations in seven countries.

"'LCI's strong capabilities in polymer filtration, mixers and heat exchangers and gear pmnps will enhance Maag Pump Systems Textron's oper- ations worldwide," said Maag Pump Systems Textron's CEO,

Dr Frank Brinken. "Their wide array of accessory equipment will also allow us to offer an expanded product line to our customers."

Fluid Handling Products, part of Textron's US$1 billion Fluid & Power Systems Group, manufactures and designs cen- trifugal, reciprocating and posi- tive displacement pumps, pump systems and accessories for the oil, gas, petrochemical, plas- tics, polymer, chemical and pharmaceutical industries. Fluid Handling Products employs more than 900 people in manufacturing, sales and ser- vice facilities worldwide.

In just over two years, Tex- tron has put together a strong portfolio of pump operations, acquiring Maag in February 1997, David Brown in October 1998 and now LCI 's Fluid Systems Division. Textron is obvi- ously targeting the gear pump business as a growth sector. Further pump acqui- sitions are likely and a move to major player status should not be ruled out. •

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P E N T A I R O U T L I N E S

S T R A T E G I C R E S T R U C T U R I N G

700 jobs are set to go at Pen- tair, as the company stream- lines its operations, in an effort to deliver cost savings and contribute to future earnings growth.

The restructuring plan includes the consolidation of certain operations, overhead reductions, and outsourcing of specific product lines in each of the company's three busi- ness segments. "Pentair con- tinues to translorm itself and

raise its profitability• We have identified several major opportunities to accelerate this process, and this strategic restructuring strengthens our ability to meet our growth objectives," said Winslow H Buxton, chairman, president, and chief executive officer. "Overall, we foresee a 12- month payback from the time the restructuring funds are spent to the time they are returned to the company in the form of greater efficiencies and lower costs."

A US$38 million pre-tax, non-recurring charge against earnings in the first quarter of 1999 is expected to result in pre-tax savings of US$5 mil- lion in 1999, another US$26 million in 2000, and an addi- tional US$30 million in 2001. The restructuring plan is in addition to, and separate from, Pentair 's ongoing PACE

ISSUE 41 MAY 1999

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cost-saving project, which is expected to. deliver savings of US$60 million through com- pany-wide purchasing and shared services initiatives.

The Water and Fluid Tech- nologies Group will reduce the workforce at its Lincoln Industrial business and out- source some product manu- facturing. Approximately 50 per cent of the company's US manufacturing facility will be closed. This Group will absorb US$4.5 million in charges, with anticipated sav- ings of US$0.4 million in late 1999 and more than US$2.0 million in the year 2000.

Pentair's Electrical and Electronic Enclosures Group has already initiated a major overhead reduction in its European enclosure business- es, principally at the Schroff operation in Straubenhardt, Germany, and manufacturing rationalisation in its North American facilities.

The Professional Tools and Equipment Group will consol- idate distribution operations, and combine the headquarters of the two power tool business- es, Delta and Porter-Cable.

Buxton says the restruc- turing is a key element in Pen- tair's plans for the future. "'We are now more confident than ever that the pre-charge con- sensus estimate for 1999 of US$2.86 can be achieved or exceeded, and that we can continue our growth trend at an annual rate of 15 per cent or greater into the year 2000 and beyond."

1,11,12,16 M A R K E T PROSPECTS 2-4 C O M P A N Y PROFILE 5-6 JRE l 0 IN BRIEF 12,PEOPLE 13 DIVIDENDS 13 ORDERS 14 ECONOMIC

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