The Board of Directors of Goodrich Corporation has approved the tax-free spin-off of the company’s Engineered Industrial Products business to shareholders.
This transaction will create two publicly traded companies, each focused on its own customers, products and markets. The spin-off is expected to be completed in early 2002.
Application will be made to list the new shares on the New York Stock Exchange.
According to the plan, Goodrich shareholders will receive one share in the new industrial company for every five Goodrich shares they own as of the record date for the distribution.
Goodrich will treat its Engineered Industrial Products segment, which it acquired in 1999 with the Coltec Industries merger, as a discontinued operation beginning in the third quarter of 2001.
Ernest F. Schaub, the chief operating officer (COO) of the Engineered Industrial Products segment will become the CEO and a director of the new company, and William R. Holland, the former chairman of United Dominion Industries and a current member of the Goodrich Board of Directors, will become the company’s non-executive chairman. In addition, Michael J. Leslie, currently group president, Sealing Products, in the industrial segment, will become COO.
The new industrial company, headquartered in Charlotte, NC, will be a supplier of sealing technologies, compressor systems and specialty industrial bearings. It is expected to have annual revenues of approximately $800 million in 2002, including the full-year contribution of the Glacier Industrial Bearings acquisition.
It also will manufacture engines used in naval ships, locomotives and electric power plants. The company will have approximately 5,000 employees worldwide.
From a financial perspective, the new industrial company will include substantially all the assets and liabilities of the Engineered Industrial Products segment, including the associated asbestos liabilities and related insurance.
Goodrich expects to offer to exchange the outstanding Coltec public debt and trust preferred securities obligations for similar Goodrich securities prior to the spin-off. Assuming that these exchange offers are fully subscribed, the new company will have total debt of approximately $190 million at the time of the spin-off. The Goodrich Board of Directors plans to review its dividend policy prior to the spin-off for appropriate alignment with the growth profile and investment opportunities of the new Goodrich.
Goodrich Corporation will continue as a supplier of aerospace components, systems and services with expected revenues in excess of $4.2 billion for 2001.