PLYMOUTH, Mich., May 22 /PRNewswire/ -- Freudenberg-NOK announced today
that it has reached an agreement in principle to sell specific assets of
Corteco's North American Traditional Aftermarket Business to ROL
Manufacturing. Closing is expected to take place in June 2007, subject to
the fulfillment of customary closing pre-conditions.
Specifically, the agreement includes the assets in the United States,
Canada and Mexico which are related to Corteco Engine Gaskets & Seals,
Omega Power Steering Hose, and MounTec Engine & Transmission Mounts.
"The addition of Corteco's engine, power steering, and mount products
better enables us to exceed the ever increasing needs of our customers,"
states Julian Haller, president of ROL Manufacturing.
"This transaction will enable Freudenberg-NOK to focus on providing
aftermarket sealing solutions in the transmission and power steering
rebuilder market segments through its TransTec brand and to OE Service and
Tier 1 customers through its Freudenberg-NOK and Corteco brands," states
Tom Musgrave, president of the Corteco Division.
In addition, ROL Manufacturing and Freudenberg-NOK have agreed to form
a strategic alliance by means of a supply agreement to be executed at the
time of the closing of the acquisition. The agreement provides for the
exchange of services, parts and technology in order to maximize focus and
service for their respective customers and markets.
"The acquisition coupled with our strategic alliance demonstrates ROL
Manufacturing's focus to strengthen its position as a leader in the
Traditional Aftermarket," states Haller.
"We are very excited about our strategic alliance with ROL and the
opportunities it will bring in the future," adds Musgrave.
To ensure a seamless transition for Corteco customers, customer
service, product management, packaging and distribution for all three
product lines will remain at Freudenberg-NOK's Milan, Ohio, facility for up
to one year until these functions can be transferred to ROL Manufacturing's
facility in Oviedo, Fla. In the short-term, Freudenberg-NOK does not expect
a reduction in the Milan, Ohio, facility workforce due to this transaction.
Following the acquisition, the Omega Power Steering Hose manufacturing
plant in Solon, Ohio, and the Corteco de Mexico business in Queretaro,
Mexico will continue to operate as is and all employees are expected to be
retained. The Newport, Tenn., gasket manufacturing plant will be closed.
The Newport, Tenn., facility employed approximately 37 hourly and salary
employees. All manufacturing equipment and activity will be transferred to
ROL Manufacturing's brand new state-of-the-art facility in Montreal,
Canada. Several key quality and plant management employees from the Newport
facility will be retained on a contract basis by ROL Manufacturing.