Derlan Initiatives Will Create Focused Aerospace Leader
10/22/99 14:34
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: DERLAN INDUSTRIES LIMITED
TSE SYMBOL: DRL
OCTOBER 22, 1999
Derlan Initiatives Will Create Focused Aerospace Leader
TORONTO, ONTARIO--Derlan Industries Limited today announced two
initiatives which will sharpen the focus of its aerospace group,
creating the world's leading independent manufacturer of gears and
transmissions for military helicopters.
The Company has signed a letter of intent to acquire substantially
all the assets of Boeing Precision Gear, Inc. of Bedford Park,
Illinois. Boeing Precision Gear manufactures, assembles, tests
and provides maintenance and overhaul on drive systems for the
AH-64 Apache, CH-46 Sea Knight, CH-47 Chinook helicopters as well
as the F-22 Raptor fighter.
Derlan has also decided to divest its D-Velco Manufacturing of
Arizona, Inc. subsidiary and will begin accounting for it as a
discontinued operation. D-Velco is a manufacturer of large and
complex aerospace components built to customer specifications.
Negotiations for the sale of D-Velco are already underway.
"We are creating a single focus for our aerospace group with the
critical mass to be a significant player in the worldwide
aerospace gears and transmission market," said Dermot Coughlan,
Chairman and Chief Executive Officer of Derlan. "We expect this
to increase the earnings power and enhance the value of our
aerospace group."
Combined, the acquisition and divestiture will further increase
Derlan's net cash position and continue to strengthen its balance
sheet. Both transactions would be subject to regulatory review.
Boeing Precision Gear has a highly skilled workforce and a strong
working relationship with Derlan Aerospace Canada of Milton, Ont.
In May, Derlan announced the signing of a definitive agreement to
develop a new generation of drive systems for the AH-64 Apache
helicopter in concert with the Mesa Arizona facility of The Boeing
Company.
The Board of Directors of Derlan continue to work with their
advisors to maximize shareholder value and developments will be
announced as appropriate. Management and its advisors believe
these two transactions will enhance shareholder value under all of
the scenarios currently under review.
Derlan is an industrial corporation, manufacturing products for
the aerospace and pump industries. The Company has operations in
Canada, the United States, Mexico and Germany. Its shares are
listed on the Toronto Stock Exchange under the symbol DRL.
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FOR FURTHER INFORMATION PLEASE CONTACT:
Derlan Industries Limited
J. David Williamson
President and Chief Operating Officer
(416) 364-5852
INDUSTRY: CGL |
