Wärtsilä Acquires John Crane-Lips

John Crane-Lips will become part of Wärtsilä following the signing of the sale and purchase agreement between Wärtsilä and John Crane-Lips´ UK-based parent Smiths Group. The transaction enhances Wärtsilä's position as a global ship power supplier and provider of integrated propulsion systems. The acquisition price is approximately $304 million. John Crane-Lips reported net sales of $217 million and operating profit of $26.4 million in the financial year ending July 31, 2001, with their net assets totaling $73 million. The acquisition of John Crane-Lips, which will operate within Wärtsilä under the name Wärtsilä Propulsion, marks an important step towards our strategic goal to lead the ship power market. The acquisition will be earnings neutral and cash flow positive in the first year, stated Wärtsilä's President and CEO Ole Johansson. Wärtsilä will gain the brand name Lips, the best known of the John Crane-Lips portfolio, as well as the valuable Deep Sea Seals brand. Smiths Group will retain the name John Crane. Completion of the purchase is subject to regulatory approvals, which are expected for the early part of this year.