CITATION CORPORATION
2 Office Park Circle, Suite 204
Birmingham, AL 35223
Contact: Stanley B. Atkins
205-871-5731
Fax: 205-871-5772
October 30, 1996
BIRMINGHAM, Alabama - Citation Corporation (Nasdaq: CAST) announced the closing of its acquisition of Interstate Forging Industries, Inc. of Milwaukee, Wisconsin and Navasota, Texas today following a favorable vote of Interstates shareholders. The acquisition is Citations largest ever.
Interstate Forging produces custom closed die forgings of carbon, alloy and stainless steel for construction equipment, aircraft, off-road equipment, material handling, outboard motors, and truck and trailer industries.
The purchase price is approximately $47 million plus the assumption by Citation of about $23 million of Interstate Forgings debt. In addition, shareholders of Interstate can receive a contingent payment equal to five times the amount by which the average annual net earnings of Interstate before interest, taxes and acquisition related expenses exceed $10 million during the three year period from January 1, 1996 though December 31, 1998.
Interstate Forging Industries had annual net sales of $83.4 million for 1995 and is expected to have net sales of approximately $94 million for 1996. The company has approximately 500 employees at its two locations. At Milwaukee, which is also the corporate headquarters, the company produces forgings up to 50 pounds. Its other location, in Navasota, Texas, produces forgings up to 2,500 pounds. The company is a Certified Caterpillar supplier.
The current management will stay in place after the acquisition. Jim Mitchell, President of Interstate, remains in that role. Franklyn Esenberg, Chairman of Interstate, becomes Vice Chairman of Interstate, and will become a member of Citation Corporations Board of Directors.
T. Morris Hackney, Citation Chairman and CEO, said, "The acquisition of Interstate Forging Industries is a major step in broadening Citations technology and process base. We know of no corporation capable of providing highly engineered steel forgings and iron, steel and aluminum castings plus component machining and assembly, for its customers."
Citation Corporation is a metal components producer for the durable goods industry with 16 manufacturing divisions located in nine states. Sales for the most recent nine-months period was $356.1 million.