Techtronic Industries Co. Ltd. today announced that it will complete its acquisition of the Hoover floor care business from Whirlpool Corporation when the transaction closes on January 31, 2007 pursuant to the terms of the definitive purchase agreement announced December 7, 2006. TTI is combining Hoover with its existing Dirt Devil and Royal operations in Glenwillow, Ohio, to create TTI Floor Care, the largest floor care business in North America. Chris Gurreri will become president of TTI Floor Care, North America.
Under the agreement, TTI will purchase all of the assets of Hoover for US$107 million in cash. The purchase will be financed through TTI internal resources and existing lines of credit.
TTI noted that all appropriate regulatory reviews have been completed at both the federal and state levels. The applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired. The State of Ohio also completed its review of the transaction.
As part of the sale:
– TTI will assume certain liabilities of Hoover, including accounts payable as well as accruals and long-term post-retirement medical and life insurance benefits for transferred bargaining-unit employees.
– Whirlpool will retain the liabilities associated with pension and post- retirement benefit plans for currently retired Hoover employees and those who retire prior to the final closing date.
– TTI Floor Care will assume in full the existing union contract that covers approximately 800 hourly workers at Hoover’s North Canton, Ohio, manufacturing facility and nearby distribution center. The contract runs through June 2008.
– TTI Floor Care will assess all operations of Dirt Devil and Hoover, beginning immediately, to determine its specific manufacturing and distribution strategies.
– Through an agreement reached with the State of Ohio’s Department of Development, TTI Floor Care will establish its North American floor care headquarters in Glenwillow and will build a new global floor care product research and development center there. The new global R&D center will house product design and engineering associates, including the addition of approximately 110 new jobs over the next three years.
“We intend to develop innovative products that enable us to become a market leader in every floor care category,” Gurreri said. “Between TTI, Dirt Devil and Hoover, we now have under one roof a passion for floor care as well as financial and intellectual resources, design and marketing skills, a commitment to product innovation, highly recognized brands, and established retail distribution and supply chain expertise. It is truly an energizing moment and one that is full of opportunity. Consumers and retailers alike can look forward to exciting developments from our flagship brands – Dirt Devil and Hoover. The combined operations also create a strong commercial floor care business featuring the Royal and Hoover brands.”
Joseph Galli, Jr., chief executive officer of Techtronic Appliances Holding Co. Ltd., TTI’s global floor care and appliances division, concluded, “This acquisition is an important step in building a global leadership position in floor care. We are pleased to have the support of the State of Ohio as we implement our plans for the combined operations. With nearly 100 years of quality and innovation, the Hoover name is synonymous with floor care and is one of the most recognized brands in the world. The addition of Hoover to our existing floor care businesses allows us to invest much more significantly in research and development, new product innovation and marketing.”
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