Timken to spinoff steel business
The Timken Company announced a plan to spinoff its steel business from its bearings and power transmission business, creating two publicly traded companies.
Under this plan, the new engineered steel company will operate as an independent publicly held company with estimated annual revenue of approximately $1.7 billion. The bearings and power transmission (B&PT) business will continue to operate as The Timken Company with estimated annual revenue of approximately $3.4 billion.
"Timken has a long and successful history of creating value for its shareholders," said James W. Griffith, president and chief executive officer. "Over the past several years, we have transformed the business and delivered superior financial performance by diversifying and expanding customer markets and product lines, making strategic, accretive acquisitions, and introducing new capabilities around the world. We see this initiative—to build out two strong, focused companies—as further evidence of our commitment to drive value for our shareholders and our customers."
The board's decision to split Timken into two companies resulted from a thorough evaluation by a strategy committee composed of independent directors and established by the board in response to shareholder input.
Griffith, 59, will continue as president and chief executive officer of The Timken Company until the separation is complete, at which time he plans to retire after 30 years of service. The board plans to name Richard G. Kyle, 47, as The Timken Company's new president and chief executive officer, succeeding Griffith. Until then, Kyle has been named chief operating officer of the B&PT business. Kyle joined the company in 2006 with extensive industry experience and has held executive positions at Timken that include vice president of manufacturing, president of Aerospace and Mobile Industries, and, most recently, group president.
The board also plans to name Ward J. "Tim" Timken, Jr., 46, to lead the new engineered steel company as its chairman and chief executive officer. Timken's career at the company began in 1992 in the steel business as senior steel business analyst. In 2004, he was named president of the steel business, and he was elected chairman of the board in 2005. Timken will continue to serve as chairman as well as oversee the steel business until the separation.
Following the separation, the board plans to name John M. Timken, Jr., 62, non-executive chairman of The Timken Company. In that role, he assumes leadership responsibility for board activities and will oversee related board matters. Timken has been an active member of The Timken Company's board since 1986.
The Timken Company and the new stand-alone engineered steel company will name new separate boards of directors, which are expected to include a strong base of directors drawn from The Timken Company's current board membership along with new board members.
The company notes that there can be no assurances regarding the ultimate timing of the transaction or that the transaction will be completed. Although the separation of the B&PT and steel businesses will not require a shareholder vote, the plan will be subject to customary regulatory approvals and final approval of the Timken board.
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