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EXHIBIT 99.1
[GENCORP - LOGO]
Rosemary B. Younts
Sr. VP, Communications
(916) 351-8650
(916) 804-7820
NEWS RELEASE
Terry Hall
Sr. VP, CFO
(202)828-6800
FOR IMMEDIATE RELEASE
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GENCORP MAKES MAJOR STRATEGIC GROWTH MOVE
SIGNS AGREEMENT TO ACQUIRE GLOBAL AUTOMOTIVE SUPPLIER, DRAFTEX
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SACRAMENTO, CA, OCTOBER 22, 2000 - GenCorp (NYSE: GY) today announced
that it has signed an agreement to acquire The Laird Group's Draftex
International Car Body Seals Division. This acquisition will significantly
enhance shareholder value by making GenCorp's Vehicle Sealing business the
second largest automotive vehicle sealing supplier in the world, almost doubling
segment sales. In addition to adding essential global capability, the
immediately accretive acquisition will increase cash generation to fuel other
growth activities.
"The acquisition of Draftex is consistent with the strategy we outlined
early in the year for GenCorp Vehicle Sealing," said GenCorp Chairman and CEO
Bob Wolfe. "This strategy has focused on improving margins, cash flow and the
competitive position of the business by participating in the consolidation
occurring within the automotive industry either as a buyer or a seller. Because
businesses in this industry currently have relatively low valuations, the
substantial benefits that will be gained from acquiring Draftex clearly made
participation as a buyer the best alternative," Wolfe said.
"In addition to providing key new growth opportunities for our Vehicle
Sealing segment, the acquisition of Draftex will greatly improve GenCorp's cash
generation capability in the near term, allowing us to pay down debt and fuel
growth in all other areas of the Company, including defense," Wolfe added.
Draftex will bring GenCorp about $415 million in global automotive
sealing sales, together with 5,484 employees worldwide. Draftex maintains global
relationships with Volkswagen, BMW, Mercedes, Renault and Ford. Among its key
platforms are the Ford Focus,
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Volkswagen Golf and Renault Scenic. Included in the purchase agreement are
Draftex's German based worldwide headquarters and International European
Technical Center, and 11 manufacturing plants in six countries, including
Germany, France, Spain, Czech Republic, China and the U.S.
GenCorp Vehicle Sealing, with 2000 annual sales of about $460 million,
is headquartered in Farmington Hills, Michigan, and operates five manufacturing
facilities in North America, and two European plants located in Germany and
Ireland. GenCorp has earned its leading position in the Sport Utility Vehicle
and Light Truck market segments by participating on programs that include the
Ford F-Series and Ranger Pickups, Ford Explorer, General Motors' Chevy Pickup
and the Mercedes All Purpose Vehicle - many of which are among the top ten best
selling vehicles in this segment of the American market. GenCorp has further
strengthened its position over the past two years with numerous new platform
awards such as the Ford Escape, Ford Explorer Sport, Mazda Tribute, the next
generation Lincoln and others.
The acquisition of Draftex will enhance GenCorp Vehicle Sealing in a
number of important ways:
- Increases annual combined sales to an estimated $875 million,
together with significant increases in profit and cash generation
capabilities;
- Provides international scale, essential in the automotive
environment to successfully serve and support OEM customers on a
global basis;
- Allows GenCorp to rationalize and restructure production capacity
in both Europe and North America to achieve better utilization
and profitability in its operations;
- Broadens and geographically diversifies GenCorp Vehicle Sealing's
customer base;
- Greatly expands GenCorp Vehicle Sealing's presence in the
passenger car market segment which, when combined with an
existing leadership position in the Sport Utility Vehicle and
Light Truck markets, provides a more balanced portfolio of
products and customers;
- Adds additional R&D capabilities and technology, which will
enhance support to our customers and enables the development of
more complex products;
- Provides immediate entry into the Asian market as a platform for
future growth.
GenCorp anticipates the Draftex acquisition to be complete before
year-end and expects earnings to be accretive in year one.
GenCorp is a technology-based manufacturer, with leading positions in
the aerospace and defense, pharmaceutical fine chemicals and automotive
industries. Additional information about GenCorp can be obtained by visiting the
Company's web site at http://www.GenCorp.com.
