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EXHIBIT 20.01
GENTEK TO ACQUIRE DIGITAL COMMUNICATIONS GROUP OF PRESTOLITE WIRE CORPORATION
HAMPTON, N.H., July 6 /PRNewswire/ -- GenTek Inc. (NYSE: GK) announced
today that it has agreed to acquire the Digital Communications Group of
Prestolite Wire Corporation, a privately held company, for $90 million in cash.
Prestolite's Digital Communications Group manufactures voice- and data-
quality copper and fiber-optic cable for the telecommunications industry. The
group generated revenue of $72 million in 1999 and is expected to generate
revenue in excess of $100 million in 2000.
The company offers a comprehensive range of structured cabling
products, including:
TrueNet'TM'-branded Category 5, 6 and copper cable for high
bandwidth data transmission;
T-1/DS-1 and high-pair-count cabling for voice and data
transmission in public networks;
Single- and multi-mode fiber-optic cables for the
telecommunications market;
Highly engineered fiber-optic cables for use in harsh
environments, military operations and other specialized applications;
and
Hybrid fiber/copper cables for specialty and multi-media
applications.
"Prestolite's Digital Communications Group fits well with Krone,
GenTek's principal telecommunications subsidiary, and will be immediately
accretive to GenTek's earnings," said Paul M. Montrone, chairman and controlling
shareholder of GenTek. "This combination will allow GenTek to provide complete
connectivity and structured cabling systems that maximize network bandwidth and
speed. We are particularly excited by the prospects for the Digital
Communications Group's optical fiber division, Northern Lights Cable, which is
experiencing solid growth and will add important product development
capabilities to Krone's existing optical fiber activities."
As a result of this transaction, GenTek's telecommunications segment
will generate pro forma annualized sales of more than $450 million.
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In addition to being the controlling shareholder of GenTek, Mr.
Montrone is also the controlling shareholder of Prestolite Wire. As such, the
transaction was approved by a special committee of independent directors of
GenTek. The special committee retained and was advised by Morgan Stanley & Co.
Incorporated and Kirkland & Ellis. Morgan Stanley provided a fairness opinion to
the committee, stating that the transaction was fair from a financial standpoint
to GenTek.
Prestolite's Digital Communications Group has been winning major
digital subscriber line (DSL) infrastructure supply contracts from incumbent
telecommunication service providers as well as competitive local exchange
carriers (CLECs). Combining the Digital Communications Group's success in this
area with Krone's connectivity expertise will position GenTek to take further
advantage of the explosive growth in DSL and other broadband Internet
applications worldwide.
The combination also will enhance the marketing of Prestolite's
TrueNet'TM' cabling systems, the most advanced local area network (LAN) solution
on the market today. This exciting new technology has been selected by a number
of Fortune 500 companies around the world for their LAN system deployments.
Krone connectivity is an integral part of this high-bandwidth gigabit Ethernet
system and enables the combined company to offer a turnkey local area network
that provides unsurpassed network reliability and efficiency.
Headquartered in Denver, Colo., the Digital Communications Group
operates manufacturing facilities in Sidney, Neb., and North Bennington, Vt.
Additional information regarding the synergies of this acquisition is
available in the attached table.
The acquisition of Prestolite's Digital Communications Group, GenTek's
fourteenth acquisition since 1997, is expected to close during the third quarter
and is subject to regulatory approval.
GenTek Inc. is a technology-driven manufacturer of telecommunications
equipment and other products. Additional information regarding GenTek can be
found on the World Wide Web at www.gentek-global.com.
* * *
This announcement includes forward-looking statements. GenTek has based
these forward-looking statements on its current expectations and projections
about future events. Although GenTek believes that its assumptions made in
connection with the forward-looking statements are reasonable, no assurances can
be given that its
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assumptions and expectations will prove to have been correct. These
forward-looking statements are subject to various risks, uncertainties and
assumptions. GenTek undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this announcement might not occur.
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Table I
GenTek and Prestolite Digital Telecommunications
Product Synergies
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<CAPTION>
Krone Prestolite Wire Applications
----- --------------- ------------
<S> <C> <C>
LAN System Connectivity TrueNet'TM'-Enhanced High-Bandwidth Data
Solutions Cabling Systems Transmission at Gigabit
Ethernet Speeds
Wide Area Network/Co- DS-1/T-1 High-Speed Wide Area Network
Location Connectivity Cabling Systems Solutions, including those
in public network central
offices and co-location
environments, for all forms
of DSL service and other
broadband applications
Krone'r' Optical Single- and Multi-Mode Optical fiber solutions for
Connectivity and Hardware Fiber Optic Transmission local and wide area
Cabling networks
Private Branch Exchange Category 1-3 Voice Voice-grade Telephony
(PBX) Connectivity Transmission Cabling
</TABLE>
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