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K-Tron Acquires Pennsylvania Crusher
Corporation
PITMAN, N.J., Jan. 6 -- K-Tron
International, Inc. today announced the acquisition of all of the
stock of privately held Pennsylvania Crusher Corporation ("PCC")
and its wholly owned subsidiary, Jeffrey Specialty Equipment
Corporation ("Jeffrey"). The purchase price was $23.5
million, of which $19.5 million was paid in cash and $4.0 million
was in unsecured, promissory notes which are payable in equal,
annual installments on January 2 in each of 2005, 2006 and 2007. The
purchase price is subject to adjustment based on PCC's consolidated
stockholders' equity at December 31, 2002.
 Pennsylvania
Crusher Corporation, which is headquartered in Broomall,
Pennsylvania and has a manufacturing facility in Cuyahoga Falls,
Ohio, is a leading manufacturer of size reduction equipment which is
sold to electric utility companies to crush coal for use in coal-
fired power generation plants. Tracing its roots back to 1905, PCC
estimates that its machines crush a significant majority of all U.S.
steam coal for the electric utility industry. PCC equipment most
commonly used by power plants includes hammermills, Bradford
breakers, Coalpactors(R), cage mills, granulators (ring hammermills),
clinker crushers and grinding mills. A substantial part of PCC's
business comes from replacement parts sales since it has a large
installed base of equipment.
Jeffrey Specialty Equipment
Corporation ( http://www.jeffreycorp.com/
), which is located in a manufacturing/office facility in Woodruff,
South Carolina near Greenville, is a leading manufacturer of
industrial hammermills for size reduction used primarily by the
paper and pulp industries to crush wood for the production of paper.
Jeffrey, whose origins go back to 1874, also manufactures
large-scale vibratory feeders for use in feeding coal, minerals,
chemicals and bulk materials. Like PCC, replacement parts sales are
a major part of Jeffrey's business.
Top management of PCC is expected to
remain following the acquisition, including John Whalen, the
Chairman and Chief Executive Officer, Don Melchiorre, the President
and Chief Operating Officer, Don Carrozzino, Vice President, Finance
and Chief Financial Officer, and Nancy S. Hansen, Vice President,
Administration.
For the trailing 12-month period
ended November 30, 2002, PCC's unaudited consolidated (with Jeffrey)
net sales were $34.76 million and its unaudited consolidated
operating income was $4.57 million. The acquisition was structured
as a corporate leveraged buy-out, with the Philadelphia office of
National City Bank providing $15 million of financing through two
tranches of term debt and a revolving credit facility. These loans
were made directly to PCC with no recourse to K-Tron. K-Tron also
borrowed $5 million in connection with the transaction from The Bank
(formerly The Bank of Gloucester County), a subsidiary of Fulton
Financial Corporation, and issued the $4 million of notes payable to
the selling stockholders. There was no subordinated debt or K-Tron
stock involved. Also, neither PCC nor Jeffrey has any debt for money
borrowed except for the acquisition financing from National City
Bank, including an additional $2 million of availability under the
revolving credit line for working capital purposes.
Commenting on the acquisition, K-Tron
Chairman and Chief Executive Officer Edward B. Cloues, II said,
"We are exceptionally pleased to be able to add Pennsylvania
Crusher Corporation and Jeffrey Specialty Equipment Corporation to
K-Tron's growing family of high-quality material handling
businesses. PCC and Jeffrey have excellent market positions and
reputations, good profitability, solid product offerings, quality
management and work forces and strong cash flow production
capability, driven largely by a steady replacement parts business
that constitutes a significant portion of their revenues.
The fact that PCC and Jeffrey serve
very different material handling markets than K-Tron does today and
generate a major part of their business from the sale of replacement
parts will broaden and diversify K-Tron's business and reduce our
dependence on some of the more cyclical markets that we serve, such
as plastics and chemicals." John Whalen, Chairman and Chief
Executive Officer of both PCC and Jeffrey, added, "The entire
management teams at PCC and Jeffrey are enthusiastic about the
increased opportunities that the acquisition by K- Tron will afford
PCC and Jeffrey, particularly with respect to global
expansion."
While indicating that K-Tron does not
intend to provide guidance to the market with respect to future
earnings, Mr. Cloues said that he expects the acquisition of PCC and
Jeffrey to be accretive to K-Tron's earnings and cash flow per share
in 2003.
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 Canada, and its equipment is
sold throughout the world.
Source:
Mr. Ronald Remick
Senior VP and CFO
K-Tron International, Inc.
Telephone: +1-856-256-3311
Email: remick@ktron.com
Web site: K-Tron
International 
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