Freudenberg-NOK to sell its Traditional Aftermarket Business - Consisting of Engine Gaskets, Power Steering Hose and Engine and Transmission Mounts to ROL Manufacturing
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.
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