The addition of GSW to A.O. Smith's existing water heater operations enhances its position in the retail channel of the U. S. residential water heater market segment, says the company. It also raises its profile in the Canadian water heater market.

"GSW is a very well-run business with talented people and productive operations in the U. S. and Canada," said Ajita G. Rajendra, president of A.O. Smith Water Products Co. "This combination of products, brands, and people enhances A.O. Smith's status as one of the leading global suppliers of residential and commercial water heaters."

"The addition of GSW's American Water Heater Company partners us with Lowe's, one of the leaders in the home improvement industry," Rajendra continued. "As we integrate the GSW business, we intend to take advantage of our manufacturing capabilities to enhance our ability to serve the needs of our customers throughout the world."

A.O. Smith expects to generate savings of $3 million in 2006 resulting primarily from reduced administrative expenses and reduced costs for raw materials. The company forecasts earnings accretion in 2006 from the acquisition, including these synergies, to total approximately $.35 per share, or $11 million after taxes.

GSW employs more than 1,700 people at its three operating divisions in Canada and the United States.

A.O. Smith Water Products Co., with headquarters in Ashland City, Tenn., manufactures residential, standard, and specialty commercial water heaters as well as high-efficiency boilers, hot water storage tanks, and pump tanks.

Publication date: 04/24/2006