Federal Signal Corporation Announces Sale Of Three Industrial Cutting Tool Businesses

Oak Brook, IL - Federal Signal Corporation recently announced plans to sell three of its industrial tooling businesses to Kennametal, Inc., a global supplier of tooling, engineered components and advanced materials consumed in production processes.

The sale includes Manchester Tool Company, On Time Machining Company (OTM) and Clapp Dico Corporation, which are leading producers of durable and consumable industrial cutting tools in North American markets. The three Ohio-based companies together generate annual sales of approximately $40M. Federal Signal will continue to operate its industrial die and mold tooling businesses, Dayton Progress Corporation and PCS Company.

Federal Signal expects to receive proceeds from the sale, net of taxes,of about $60M and expects to recognize a gain on the transaction. It is anticipated that this divestiture will be modestly dilutive based on 2006 earnings. The transaction is expected to close in late January or early February of 2007, subject to closing conditions.

"The divestiture of the industrial cutting tool businesses enables us to focus on investments and activities that streng then our strategic products and solutions," said Robert D. Welding, president and chief executive officer of Federal Signal Corporation. "Manchester, OTM and Clapp Dico are excellent companies with leading brand names. However, as previously stated, our industrial tooling businesses are not core to the overall Federal Signal vision to become the leader in advancing security and well-being in communities and workplaces around the world. The cutting tool businesses will be better positioned to grow within an organization that is strategically focused on industrial tooling. We appreciate the efforts of our Manchester, OTM and Clapp Dico employees over the years and wish them all the best."

SOURCE: Federal Signal Corporation