Pitman, New Jersey - - September 17, 2007 - - K-Tron International, Inc. (NASDAQ-KTII) today announced the acquisition by its Jeffrey Specialty Equipment Corporation subsidiary (“Jeffrey”) of all of the stock of privately-held Rader Companies, Inc. (“Rader”). The purchase price was $15.945 million, all of which was paid in cash, including a $2.3 million escrow. The purchase price is subject to adjustment based on Rader’s net working capital on the closing date. K-Tron financed the Rader acquisition by borrowing the full amount of the purchase price under its existing credit facility with Citizens Bank of Pennsylvania.
At the sellers’ direction, $3.798 million of the purchase price was delivered to Rader on the closing date to satisfy indebtedness owed to Rader by two other companies also owned by the sellers. This cash, together with other cash of Rader, was then used to pay off all of that company’s bank debt, which amounted to approximately $3.832 million.
Rader, which is headquartered in Alpharetta, Georgia, manufactures and markets pneumatic conveying systems, screening equipment, engineered storage and reclaim systems and truck dumpers for processing bark and wood chips for the global pulp and paper and forest products industries; the Razorback™ sizer which is used to size bark and waste wood in wood fiber processing applications; and the EDK feeder/delumper which is used by the worldwide petrochemical industry in manufacturing polypropylene and polyethylene. The company also has sales and service offices in Montreal and Vancouver, Canada and in Stockholm, Sweden.
Tracing the origins of its business back more than 50 years, Rader has a well-established customer base in North America and throughout the world, resulting in significant repeat business, and replacement parts are an important aspect of that business. For the 12-month period ended June 30, 2007, Rader’s unaudited revenues were approximately $25 million.
Top operating management of Rader, which consists of seven of the nine former shareholders, will remain following the acquisition, including Tony Lubiani, President and CEO and head of sales, Richard Goncalves, President and General Manager of the company’s Canadian subsidiary and five other shareholders who have led Rader’s Engineering (Mike Barron), Purchasing (Fred Rogers), Customer Service (Ted Gentile), Sales Support (Conrad Matula) and R&D (Bryan Lanham) departments since the beginning of 2000. Mr. Lubiani will report to Don Melchiorre, Senior Vice President of K-Tron responsible for its Size Reduction Group.
Commenting on the transaction, K-Tron Chairman and Chief Executive Officer Edward B. Cloues, II said, “The acquisition of Rader significantly expands the scope of K-Tron’s activities in the pulp and paper and forest products industries, which we have been serving through our Jeffrey subsidiary located in Woodruff, South Carolina. The combination of the Jeffrey and Rader businesses over the next 12-to-18 months should enhance the strong position of each company as an equipment supplier to these industries, traditionally the primary customer base of both companies. The acquisition of Rader also provides K-Tron with a platform to participate in the rapidly growing worldwide business of biomass derived fuels, a new field that Rader has been pursuing successfully during the past two years.”
Added Don Melchiorre, “This is an exciting expansion of K-Tron’s Size Reduction Group and especially of our Jeffrey business. From an operational perspective, the acquisition will provide fuller utilization of Jeffrey’s manufacturing assets, and both organizations should benefit significantly from improved efficiencies and cost savings in the areas of sales, engineering, administration and customer service. And with Tony Lubiani and his management team continuing to operate the Rader business, we will immediately benefit from established market and product knowledge and domestic and international customer relationships.”
While indicating that K-Tron does not normally provide guidance to the market with respect to future earnings, Mr. Cloues said that he expects the acquisition to be accretive to earnings per share in 2008.
K-Tron International, Inc. and its subsidiaries design, produce, market and service material handling equipment and systems for a wide variety of industrial markets. The Company has manufacturing facilities in the United States, Switzerland, the United Kingdom and the People’s Republic of China, and its equipment is sold throughout the world.
For more information on K-Tron International, please visit:
K-Tron Acquires Rader
K-TRON ACQUIRES RADER COMPANIES, INC.
Pitman, New Jersey - - September 17, 2007 - - K-Tron International, Inc. (NASDAQ-KTII) today announced the acquisition by its Jeffrey Specialty Equipment Corporation subsidiary (“Jeffrey”) of all of the stock of privately-held Rader Companies, Inc. (“Rader”). The purchase price was $15.945 million, all of which was paid in cash, including a $2.3 million escrow. The purchase price is subject to adjustment based on Rader’s net working capital on the closing date. K-Tron financed the Rader acquisition by borrowing the full amount of the purchase price under its existing credit facility with Citizens Bank of Pennsylvania.
At the sellers’ direction, $3.798 million of the purchase price was delivered to Rader on the closing date to satisfy indebtedness owed to Rader by two other companies also owned by the sellers. This cash, together with other cash of Rader, was then used to pay off all of that company’s bank debt, which amounted to approximately $3.832 million.
Rader, which is headquartered in Alpharetta, Georgia, manufactures and markets pneumatic conveying systems, screening equipment, engineered storage and reclaim systems and truck dumpers for processing bark and wood chips for the global pulp and paper and forest products industries; the Razorback™ sizer which is used to size bark and waste wood in wood fiber processing applications; and the EDK feeder/delumper which is used by the worldwide petrochemical industry in manufacturing polypropylene and polyethylene. The company also has sales and service offices in Montreal and Vancouver, Canada and in Stockholm, Sweden.
Tracing the origins of its business back more than 50 years, Rader has a well-established customer base in North America and throughout the world, resulting in significant repeat business, and replacement parts are an important aspect of that business. For the 12-month period ended June 30, 2007, Rader’s unaudited revenues were approximately $25 million.
Top operating management of Rader, which consists of seven of the nine former shareholders, will remain following the acquisition, including Tony Lubiani, President and CEO and head of sales, Richard Goncalves, President and General Manager of the company’s Canadian subsidiary and five other shareholders who have led Rader’s Engineering (Mike Barron), Purchasing (Fred Rogers), Customer Service (Ted Gentile), Sales Support (Conrad Matula) and R&D (Bryan Lanham) departments since the beginning of 2000. Mr. Lubiani will report to Don Melchiorre, Senior Vice President of K-Tron responsible for its Size Reduction Group.
Commenting on the transaction, K-Tron Chairman and Chief Executive Officer Edward B. Cloues, II said, “The acquisition of Rader significantly expands the scope of K-Tron’s activities in the pulp and paper and forest products industries, which we have been serving through our Jeffrey subsidiary located in Woodruff, South Carolina. The combination of the Jeffrey and Rader businesses over the next 12-to-18 months should enhance the strong position of each company as an equipment supplier to these industries, traditionally the primary customer base of both companies. The acquisition of Rader also provides K-Tron with a platform to participate in the rapidly growing worldwide business of biomass derived fuels, a new field that Rader has been pursuing successfully during the past two years.”
Added Don Melchiorre, “This is an exciting expansion of K-Tron’s Size Reduction Group and especially of our Jeffrey business. From an operational perspective, the acquisition will provide fuller utilization of Jeffrey’s manufacturing assets, and both organizations should benefit significantly from improved efficiencies and cost savings in the areas of sales, engineering, administration and customer service. And with Tony Lubiani and his management team continuing to operate the Rader business, we will immediately benefit from established market and product knowledge and domestic and international customer relationships.”
While indicating that K-Tron does not normally provide guidance to the market with respect to future earnings, Mr. Cloues said that he expects the acquisition to be accretive to earnings per share in 2008.
K-Tron International, Inc. and its subsidiaries design, produce, market and service material handling equipment and systems for a wide variety of industrial markets. The Company has manufacturing facilities in the United States, Switzerland, the United Kingdom and the People’s Republic of China, and its equipment is sold throughout the world.
For more information on K-Tron International, please visit:
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