UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 3, 2015
THE TIMKEN COMPANY
(Exact Name of Registrant as Specified in its Charter)
Ohio
(State or Other Jurisdiction
of Incorporation)
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1-1169 |
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34-0577130 |
(Commission
File Number) |
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(IRS Employer
Identification No.) |
4500 Mt. Pleasant St. N.W., North Canton, Ohio 44720-5450
(Address of Principal Executive Offices) (Zip Code)
(234) 262-3000
(Registrants telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any
of the following provisions.
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 |
Regulation FD Disclosure. |
The Timken Company (the Company) issued a press
release on August 3, 2015 announcing that it has entered into a definitive agreement to acquire the Carlstar belts business. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by
this reference.
Also on August 3, 2015, the Company posted investor slides on its website, www.timken.com, in connection with
the transaction. A copy of the investor slides is attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by this reference.
This information shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934 (the
Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
As described in Item 7.01 above, the Company has entered into an
equity purchase agreement with The Carlstar Group LLC to acquire the Carlstar belts business from American Industrial Partners for $220 million. The transaction, expected to close in the third quarter of 2015, is subject to customary government and
regulatory approvals as well as other customary closing conditions and will be funded with a combination of cash and debt.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit No. |
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Description |
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99.1 |
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Press Release of The Timken Company dated August 3, 2015. |
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99.2 |
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Investor Slides dated August 3, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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THE TIMKEN COMPANY |
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By: |
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/s/ William R. Burkhart |
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William R. Burkhart |
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Executive Vice President, General Counsel
and Secretary |
Date: August 3, 2015
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Press Release of The Timken Company dated August 3, 2015. |
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99.2 |
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Investor Slides dated August 3, 2015. |
Exhibit 99.1
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NEWS RELEASE |
Timken To Acquire Carlstar Belts Business,
Further Expanding Its Product Portfolio
NORTH CANTON, Ohio: August 3, 2015 The Timken Company (NYSE: TKR; www.timken.com), the world leader in tapered roller
bearings, today announced that it has reached an agreement with American Industrial Partners to acquire the Carlstar Belts Business (Carlstar Belts), a leading North American manufacturer of belts used in industrial, commercial and
consumer applications under well-recognized brands including Carlisle®, Ultimax® and Panther®, among others. The transaction is expected to be accretive over the balance of 2015. For the 12 months ending June 30, 2015, Carlstar Belts sales were approximately $140 million.
Acquiring the Carlstar Belts business expands our offering in existing and complementary end markets and broadens our ability to bring
customers a diverse package of premium mechanical power transmission products and services, said Richard G. Kyle, Timken president and chief executive officer. Were gaining a well-respected business with great talent and
leadership, strong manufacturing capabilities, an expanding industrial product offering and excellent customer base.
Kyle noted
Carlstar Belts brings an important new product category into the Timken portfolio, which continues to have bearings at its core. The company has diversified its portfolio beyond bearings in recent years, adding gearboxes, chain, couplings,
lubrication systems and a variety of industrial services, which are marketed under well-known industrial brands including Philadelphia Gear®,
Drives® and InterlubeTM.
This acquisition advances our strategic plan, which includes leveraging Timken technology and know-how to grow organically as well as
building value through bolt-on acquisitions in bearings and adjacent products and services, Kyle added. Like Timken, this business has long-standing customer relationships, deep technical expertise and unique operating capabilities,
making it an ideal fit. While Carlstar Belts and Timken share many existing customers and applications, the acquisition will bring new market opportunities to each, extending our collective application and channel strength to benefit our OEM
customers and distributors.
The transaction, expected to close in the third quarter of 2015, is subject to customary government and
regulatory approvals and will be funded with a combination of cash and debt.
About the Carlstar Belts Business
Carlstar Belts supplies power transmission belts for industrial, commercial and consumer applications primarily in North America. Originally
founded over 100 years ago as part of the Dayco Corporation, the business today has approximately 750 employees, is headquartered in Springfield, Mo., and sells its products under industry-leading, well-recognized brands including Carlisle®, Ultimax® and Panther®, among
others. The Carlstar Belts product portfolio features more than 20,000 SKUs specifically engineered for demanding applications. The product line is engineered for maximum performance and
durability and is available in wrap molded, raw edge, v-ribbed and synchronous belt designs.
About American Industrial Partners
American Industrial Partners (AIP) is an operationally oriented middle-market private equity firm that makes control investments in
North American-based industrial businesses serving domestic and global markets. The firm has deep roots in the industrial economy and has been active in private equity investing since 1989. To date, AIP has completed over 50 transactions and is
currently managing more than $1.1 billion in equity capital. AIP invests in all forms of corporate divestitures, management buyouts, recapitalizations and going-private transactions of established businesses with revenues of $75 million$1
billion. For more information about American Industrial Partners, contact Ben DeRosa, partner at 212-627-2360, extension 200 or visit www.americanindustrial.com.
About The Timken Company
The
Timken Company (NYSE: TKR; www.timken.com) engineers, manufactures and markets bearings, transmissions, gearboxes, chain and related products, and offers a spectrum of powertrain rebuild and repair services. The leading authority on tapered
roller bearings, Timken today applies its deep knowledge of metallurgy, tribology and mechanical power transmission across a variety of bearings and related systems to improve reliability and efficiency of machinery and equipment all around the
world. The companys growing product and services portfolio features many strong industrial brands including Timken®, Fafnir®,
Philadelphia Gear®, Drives® and InterlubeTM. Known for its quality products and
collaborative technical sales model, Timken posted $3.1 billion in sales in 2014. With 14,000 employees operating from 28 countries, Timken makes the world more productive and keeps industry in motion.
Certain statements in this release (including statements regarding the companys estimates and expectations) that are not historical
in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements regarding the companys expectations regarding accretion and the expected market
opportunities are forward-looking. The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including: the inability to complete the
acquisition due to either the failure to satisfy any condition to the closing of the transaction, including receipt of regulatory approval, or the occurrence of any event, change or other circumstance that could give rise to the termination of the
purchase agreement; the inability to successfully integrate the newly acquired business into the companys operations or achieve the expected synergies associated with the acquisition; and adverse changes in the markets served by the newly
acquired business. Additional factors are discussed in the companys filings with the Securities and Exchange Commission, including the companys Annual Report on Form 10-K for the year ended Dec. 31, 2014, quarterly reports on Form
10-Q and current reports on Form 8-K. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or
otherwise.
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The Timken Company |
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Media Contact: |
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Investor Relations: |
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Gloria Irwin |
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Shelly Chadwick |
Communications Manager |
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Vice President Treasury & Investor Relations |
Telephone: 234.262.3514 |
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Telephone: 234.262.3223 |
Mediarelations@timken.com |
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Shelly.chadwick@timken.com |
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The Timken Company |
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Expanding the Timken Power Transmission Portfolio:
Carlstar Belts August 3, 2015 Exhibit 99.2 |
2 Forward-Looking Statements Safe Harbor Certain statements in this presentation (including statements regarding the company's forecasts, beliefs,
estimates and expectations) that are not historical in nature are
"forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. In particular, the statements related to Timkens plans, outlook, future financial performance, targets, projected sales, cash flows, liquidity and expectations
regarding the future financial performance of the company, including the
information under the headings, Strategic Rationale
and Financial Summary are forward-looking. The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important
factors, including: the inability to complete the acquisition due to either the
failure to satisfy any condition to the closing of the
transaction, including receipt of regulatory approval, or the occurrence of any event, change or other circumstance that could give rise to the termination of the purchase agreement; the inability to
successfully integrate the newly acquired business into the companys
operations or achieve the expected synergies associated with the
acquisition; and adverse changes in the markets served by the newly acquired business. Additional factors are discussed in the company's filings with the Securities and Exchange
Commission, including the company's Annual Report on Form 10-K for the year
ended Dec. 31, 2014, quarterly reports on Form 10-Q and
current reports on Form 8-K. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise.
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3 A leading North American supplier, offering power transmission belts for industrial, commercial and consumer applications Portfolio features more than 20,000 parts engineered for demanding applications Products include wrap molded, raw edge, v-ribbed, synchronous belts Serves diverse industries Business founded over 100 years ago; headquartered in Springfield, MO Carlstar Belts Business* Key Metrics* ($M) Revenue $140 Adj. EBITDA $22 % Margin 16% # of Employees ~750 *Trailing 12-months as of
June 30, 2015 Key Market Sectors
Agriculture Outdoor Power Consumer Outdoor Power Commercial Power Sports Industrial Distribution 3 The transaction, expected to close in the third quarter of 2015, is subject to customary government and regulatory
approvals as well as other customary closing conditions and will be funded with
a combination of cash and debt. |
Aligns well with Timken strategy and business model Broadens Timken power transmission products offering Leverages Timken channel strength and customer access Creates significant synergy opportunities Expected to be accretive in year one Strategic Rationale 4 |
5 Housed Units Chain & Augers Belts Gears & Services Lubrication Systems Building Out Our Power Transmission Offering Timken Power Transmission Portfolio 5 |
Leverage Timken and Carlstar customer relationships and distribution channels to drive revenue growth Expand geographically Cost synergies EPS accretive* Marginally over balance of 2015 2016 accretion of $0.08-$0.10 per share expected Expected to earn cost of capital by year 3 Financial Summary Purchase price of $220M Funded with cash and debt Transaction structure results in $23M NPV tax benefit (tax- deductible goodwill) Purchase multiple of ~9x TTM EBITDA including tax benefit Meets Financial Criteria Transaction Highlights Synergy Drivers Pro Forma (TTM) * Excluding one-time transaction costs and inventory step-up impact
6 Timken Carlstar Belts Pro forma Sales 3,001 140 3,141 Adj. EBITDA 491 22 513 % Margin 16% 16% 16% |
Dec 2012 Oct 2011 March 2013 July 2011 April 2013 May 2013 Electric motor repair and services Electric motor repair, related services, up-tower wind maintenance and repair Lubrication delivery systems Chains, augers Industrial gear drive and repair services Industrial gear drive and repair services Split roller housed units Electric motor repair and services April 2014 Nov 2014 July 2010 Spherical roller bearing steel housed unit and couplings Portfolio Transformation Building for Growth Aug 2015 Industrial and commercial belts Carlstar Belts 7 |
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