Grundfos agrees to buy American pump manufacturer

BJERRINGBRO, Denmark, Jan. 10, 2006 -- With the agreement to buy the activities of the American pump manufacturer PACO Pumps, the Grundfos Group realises a decisive element in the company's growth strategy for the American market, as the acquisition is expected to increase Grundfos' turnover in the U.S. market by 30%.

Group President and CEO Jens Jorgen Madsen says about the agreement: "We are delighted that Grundfos has finally been able to make this strategic investment, which is the result of a targeted acquisition process. With the agreement to take over PACO Pumps, the Group also takes an important step towards an increased focus on the American market that involves establishing production facilities in Mexico, a massive expansion of our U.S. sales force and an enhancement of its skills as well as setting up a local research and development function. Together, these four elements will make Grundfos an important player on the American pump market, and with its own production in the U.S. and Mexico, the Grundfos Group will in future be less dependent on fluctuations in the dollar exchange rate."

By buying PACO, Grundfos increases its turnover on the North American market beyond the US$250-million mark.

PACO, a well-reputed pump brand, produces cooling and air-conditioning pumps primarily for the Commercial Building Services market. The company has an annual turnover of approx. US$45 million. Its head office and production facilities are located near Houston, Texas, and it has sales branches or distributors in all American states.

The PACO activities include a production unit in China close to Shanghai. This unit, which is part of the agreement, produces pumps for the American as well as the Chinese market.

With the investment, the Grundfos Group will expand its product portfolio with a range of products specially adapted to American standards and norms.

The PACO production and brand will continue under a newly established entity called Grundfos CBS Inc. The PACO name will remain as a product brand. With regard to sales and marketing, Grundfos will carry out a gradual integration so that a number of synergies between PACO and Grundfos will be realised over the next 2-3 years.

The present management of PACO and Grundfos' American Regional Managing Director Larry Wimmer will be charged with the overall responsibility and report to Grundfos Board Chairman and Group Executive Vice President Soren O. Sorensen.

PACO (www.paco-pumps.com), which is owned by the Swiss Sulzer group, has an annual turnover of US$45 million and a total of 225 employees. It was founded in 1907.

With headquarter in Winterthur, Switzerland, Sulzer (www.sulzer.com) is operating globally in the machinery and equipment, as well as the surfacing technology business. The company employs about 10,000 people. The total turnover in 2004 was about CHF 2 billion [US$1.56 billion].

Grundfos (www.grundfos.com) is one of the world's largest and leading companies within the development, production and sale of pumps, pump systems, electronic motors and electronics. After the acquisition of PACO, the group employs 14,000 people in 40 countries and will have its own production sites in 14 countries throughout Europe, the Far East and North and South America. Turnover DKK 13 billion [US$2.1 billion].

[US$1 = CHF1.281 = DKK6.184]

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