GSW Inc.
TSX : GSW.A
TSX : GSW.SV.B

GSW Inc.

January 20, 2006 08:05 ET

GSW Inc.: A.O. Smith Reaches Agreement with Majority Shareholders

OAKVILLE, ONTARIO--(CCNMatthews - Jan. 20, 2006) - GSW (TSX:GSW.A)(TSX:GSW.SV.B) announced today that A.O. Smith has reached agreement with GSW's two majority shareholders on A.O. Smith's proposed acquisition of GSW. The parties have agreed to a purchase price of $115 (Canadian) per share for the shares owned by the majority shareholders, subject to A.O. Smith completing its remaining due diligence and negotiating formal lock up agreements with the majority shareholders and a support agreement with GSW on terms satisfactory to GSW and A.O. Smith.

GSW's two majority shareholders together hold shares representing 74% of the equity and 68% of the votes attached to all the shares. A.O. Smith has confirmed that the acquisition will be structured as an offer to all GSW shareholders to acquire their shares at $115 per share, regardless of the class of share held, and will not be subject to a minimum condition.

The two majority shareholders are subject to an exclusivity restriction under the agreement, provided A.O. Smith completes its due diligence and finalizes its agreements with the majority shareholders and GSW no later than February 3, 2006, and makes the formal take-over bid by February 23, 2006. The offer is expected to be completed by the end of March 2006. On January 17, 2006, A.O. Smith received approval under the Investment Canada Act to proceed with the proposed acquisition. As previously announced, the US Justice Department and Canadian Competition Bureau have favourably concluded their anti-trust investigations.

GSW's board of directors has struck a special committee of independent directors to review the transaction and has retained a financial advisor to advise it as to whether the transaction is fair to the minority shareholders from a financial point of view. GSW's board will respond to the proposed offer after reviewing the formal offer and receiving the committee's report and recommendation.

GSW Inc. has been a manufacturing pioneer since 1847. Today, the company is a leading manufacturer and marketer of consumer durable products, including water heaters and building products. The company employs over 1,700 people at three operating divisions in Canada and the United States. GSW is listed on the Toronto Stock Exchange under the symbols GSW.a and GSW.sv.b. For more information about the company, visit www.gswinc.com.

This release contains forward-looking statements, which reflect management's current views of future events and operations. These forward-looking statements are based on assumptions and external factors, including assumptions relating to product pricing, competitive market conditions, financial data, and other risks or uncertainties detailed from time to time in the Company's filings with securities regulatory authorities. These forward-looking statements represent the Company's judgment as of the date of this release and any changes in the assumptions or external factors could produce significantly different results.

Contact Information

  • GSW Inc.
    Jamie Hyde
    Chief Financial Officer
    (905) 829-1197, Ext.227
    jhyde@gswinc.com