GL&V signs letter of intent to acquire EIMCO division

Aug. 13, 2002
GL&V announces that it has signed a letter of intent with Baker Hughes Inc. to acquire its EIMCO Process Equipment division.

MONTREAL, PQ, Aug. 13, 2002 -- GL&V announces that it has signed a letter of intent with Baker Hughes Inc. to acquire its EIMCO Process Equipment division.

Headquartered in Salt Lake City, Utah, EIMCO is a supplier of high-performance technologies for liquid/solid separation processes serving various industries such as chemicals and petrochemicals, mining and minerals, municipal and industrial water treatment, power generation, and waste water treatment.

With sales of US$180 million (Cdn$280 million) for its last fiscal year, EIMCO has earned an international reputation and strong brand recognition for its top-quality products and services.

"This highly strategic acquisition would make a major contribution to GL&V's sales and profit growth," said Laurent Verreault, President and Chief Executive Officer.

"Given the synergies between our organizations, expertise and international networks, we believe we can create significant economies of scale annually within three years. In addition, this acquisition would triple our Process Group's sales, which would fit perfectly with our strategic goal of better balancing our revenues between our two major business segments: the Pulp and Paper Group and the Process Group. In fact, the acquisition of EIMCO would bring the proportion of our revenues from the pulp and paper industry from 70% to about 40% of our total business."

Having been in business more than 100 years, EIMCO benefits from an extensive base of installed equipment in operation around the world, which holds considerable potential for aftermarket services, GL&V's main business segment.

"Finally, like GL&V, EIMCO outsources most of its manufacturing to an international network of subcontractors and operates only one plant, in Salt Lake City, which represents a great advantage in terms of operational profitability and flexibility," added CEO Laurent Verreault.

This acquisition, which would be GL&V's largest in its history, is subject to customary conditions, including financing, due diligence and regulatory and board approvals. If successful, it is expected the transaction would be finalized toward the end of October and would be financed by bank debt.

Founded in 1975, GL&V is involved with the design, manufacture, upgrading, and after-sales servicing of engineered equipment used in pulp and paper production and in liquid/solid separation processes.

Besides the pulp and paper industry, the company serves various industrial sectors such as mining and minerals, chemicals and food, energy and the environment.

GL&V holds the proprietary rights to a portfolio of technologies and trademarks recognized around the world. Besides its own manufacturing facilities in North America, its products are manufactured primarily by an international network of subcontractor partners, providing the company with rapid execution and a competitive cost structure that can easily be adapted to market fluctuations.

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