HVAC Breaking News

Feb. 2, 2006: A.O. Smith Reaches Agreement to Acquire GSW

February 2, 2006
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MILWAUKEE - A.O. Smith Corp. announced that it has reached an agreement with the two majority shareholders of GSW Inc. on A.O. Smith's pending acquisition of the Canadian-based company. The parties have agreed to a purchase price of $115 (Canadian) per share for the shares owned by the two majority shareholders and confirmed the price will be made available to all shareholders. This equates to a purchase price of approximately $393.5 million (Canadian).

The agreement is conditional upon A.O. Smith successfully completing its remaining due diligence review and negotiating definitive agreements. On Jan. 17, A.O. Smith received approval under the Investment Canada Act to proceed with the proposed acquisition, and the U.S. Justice Department and Canadian Competition Bureau have also favorably concluded their antitrust investigations. Under the agreement, A.O. Smith maintains the exclusive rights to pursue the acquisition of the majority shareholders' shares. The company expects to complete due diligence and submit a tender offer for all outstanding GSW shares in February and, if successful, will target to conclude the transaction by the end of the first quarter.

GSW, with 2004 sales of approximately $580 million (Canadian), is comprised of two business segments - water heating and building products. The water heating segment manufactures and markets water heaters sold in the U.S. and Canada through its American Water Heater Co. and GSW Water Heater subsidiaries. The water heater segment reported sales of approximately $540 million (Canadian) in 2004.

GSW's Building Products business, with 2004 sales of approximately $40 million (Canadian), manufactures and markets vinyl rain ware systems primarily for North American retail customers.

Publication date: 01/30/2006

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