MagneTek sells Drive Products division to Yaskawa

LOS ANGELES/PRNewswire/—MagneTek, Inc. today announced that it has sold the Drive Products division of its Drives & Systems group to Yaskawa Electric America, Inc. (YEA), Waukegan, IL, for approximately $28 million in cash, subject to purchase price adjustments. Based in New Berlin, WI, the Drive Products division buys, modifies and resells inverters manufactured by YEA to a broad range of customers in North America.

Included in the divestiture are certain facilities in New Berlin, WI, as well as branch sales and service offices in Los Angeles, Detroit and Cincinnati. Sales representation and distribution remain unchanged; however, drives marketed by YEA will no longer be sold under the "MagneTek" brand name.

http://www.machinetoolsonline.com/content/IndustrySearch/Results.asp?text=yaskawa>The Industrial Controls division of MagneTek's Drives & Systems group is not included in the divestiture. Based in Menomonee Falls, WI, the Industrial Controls division designs and builds specialized drive systems and controls for cranes and hoists, elevators and mining equipment, as well as power conditioners for fuel cells and other distributed power generators. These products will continue to be marketed through existing channels under the "Electromotive Systems", "Mondel Engineering" and "MagneTek" brand names.

Commenting on the divestiture, Richard Pratt, MagneTek executive vice president and president of the company's Drives & Systems group, said, "The transaction should enable both companies to increase revenues and profit margins. YEA gains ownership of its primary sales channel to the U.S. market, while MagneTek gains financial leverage to increase investment in its own proprietary products and systems.
According to Mr. Pratt, proceeds from the divestiture will provide MagneTek with funds for additional R&D, acquisitions and debt reduction.

Yaskawa Electric America is a wholly owned subsidiary of Yaskawa Electric Corp., Kitakyushu, Japan, the world's largest producer of AC inverter drives with a 13 percent global market share.

MagneTek, Inc. manufactures digital power products for communications, industrial and building systems, data processing, imaging and other applications requiring precision power. The Company operates five manufacturing and research facilities in North America and two in Europe, employing a total of approximately 2,000 people. Listed on the New York Stock Exchange, MagneTek reported revenue of $294 million for fiscal 2000, which ended on June 30, 2000.

The foregoing announcement contains forward-looking statements that are subject to risks and uncertainties which, in many cases, are beyond the control of the company. These include but are not limited to economic conditions in general, business conditions in electrical and electronic equipment markets, competitive factors such as pricing and technology, and the risk that the company's ultimate costs of doing business exceed present estimates. Further information on factors that could affect MagneTek's financial results are described in the Company's filings with the Securities and Exchange Commission.

Yaskawa Electric America, Inc., 2121 Norman Drive South, Waukegan, IL 60085. Tel: 800-YASKAWA, ext. 7057. Fax: 847-887-7310.

Magnetek Drives & Systems, 16555 West Ryerson Road, New Berlin, WI 53151. Tel: 800-541-0939. Fax: 262-782-3418.