Combination To Expand Focus In Aerospace Market

Woodward Governor Company announced Tuesday it plans to acquire aerospace electronics supplier MPC Products Corporation, in a transaction valued at approximately $383 million.

MPC manufactures electromechanical motion control systems -- including high performance electric motors and sensors, analog and digital control electronics, rotary and linear actuation systems, and flight deck and fly-by-wire systems -- for a number of commercial and military programs, for manufacturers including Boeing, Bombardier, Raytheon, and Lockheed Martin.

That business will be spun off as a fourth Woodward business segment, Airframe Systems.

"We anticipate that, together, Woodward and MPC will deliver substantial benefits through an improved focus on aerospace energy control solutions. MPC's actuation, motor, sensor, and electronic capabilities complement our fluid energy and motion control technologies and will improve our systems offerings," said Tom Gendron, Woodward Chairman and CEO. "We believe our global footprint will enhance MPC's business to achieve stronger growth going forward."

"Woodward is a very strong, active company. We feel the combination of MPC and Woodward will give both companies an opportunity for improved growth and expansion, and with Woodward's support, MPC can further improve its leadership role in the industry," said Joan Roberti, member of the MPC Board of Directors.

The acquisition is anticipated to be completed in October 2008. Woodward expects to pay approximately $337 million at closing for all outstanding shares and to repay MPC's outstanding debt, which is currently $22 million. The company currently has a $225 million credit facility in place, all of which is currently available.

The purchase does carry an additional stipulation. MPC is currently under investigation by the US Department of Justice, regarding the company's pricing practices for government contracts prior to 2006. MPC has reached a financial settlement in principle with the US Attorney for the Northern District of Illinois -- reflected in Woodward's purchase price for the company -- but Woodward cautions the investigations continue, and "there can be no assurance as to the resolution of these matters."

FMI: www.woodward.com, www.mpcproducts.com/