CHICAGO–(BUSINESS WIRE)–Nov. 6, 2000–Unitrin, Inc. (NASDAQ: UNIT) announced today that it has entered into an agreement with Curtiss-Wright Corporation (NYSE: CW) providing for the spin-off of Unitrin’s equity ownership of Curtiss-Wright. Unitrin currently owns approximately 44% of Curtiss-Wright’s outstanding common stock. The spin-off, expected to be completed in the first half of 2001, is to be structured as a tax-free distribution to Unitrin’s shareholders. Based on the closing price of Curtiss-Wright’s common stock on November 3, 2000, the Curtiss-Wright shares to be distributed have a value of approximately $217 million or $3.20 per share of Unitrin common stock. Based on the current number of Unitrin common shares outstanding, Unitrin shareholders will receive approximately 6.5 shares of Curtiss-Wright common stock for every 100 shares of Unitrin common stock owned.
“Curtiss-Wright has represented a major investment by Unitrin in a business unrelated to our core operating businesses,” according to Richard C. Vie, Unitrin’s Chairman and Chief Executive Officer. “We believe that this transaction will deliver value to our shareholders by allowing our management to focus greater attention on our core operating businesses and distributing Curtiss-Wright’s value to our shareholders in a tax efficient manner while providing greater liquidity in the market for Curtiss-Wright’s shares.”
Under the plan, all of the 4,382,400 Curtiss-Wright shares currently held by Unitrin will be exchanged for 4,382,400 shares of a new Class B Common Stock of Curtiss-Wright that will be entitled to elect approximately 80% of the Board of Directors of Curtiss-Wright but will otherwise be substantially identical to Curtiss-Wright’s existing common stock. The Curtiss-Wright Class B Stock will in turn be distributed to the shareholders of Unitrin. All of the other outstanding shares of Curtiss-Wright common stock will remain outstanding and be entitled to elect approximately 20% of the Board of Directors of Curtiss-Wright. The exchange will be part of a Curtiss-Wright recapitalization and requires approval by Curtiss-Wright’s non-Unitrin shareholders.
In connection with the recapitalization, Curtiss-Wright will seek approval of its shareholders of certain amendments to its Restated Certificate of Incorporation providing for, among other things, the classification of its Board of Directors into three classes serving staggered three-year terms, the elimination of a stockholder’s ability to act by written consent or call a special meeting and the requirement of a two-thirds vote of shareholders to amend certain provisions of the Restated Certificate of Incorporation.
The recapitalization and spin-off transactions have been approved by both the Unitrin and Curtiss-Wright Boards of Directors. Completion of the transaction is contingent upon, among other things, approval of the spin-off’s tax-free status by the Internal Revenue Service; approval of the recapitalization plan by holders of Curtiss-Wright shares other than Unitrin; and approval by all shareholders of Curtiss-Wright (including Unitrin) of the proposed amendments to Curtiss-Wright’s Restated Certificate of Incorporation.
Unitrin, Inc. net income from investees attributable to its investment in Curtiss-Wright was $11.5 million or $0.16 per share for the fiscal year ended December 31, 1999 and $8.4 million or $0.12 per share for the nine months ended September 30, 2000. Unitrin’s investment in Curtiss-Wright under the equity method of accounting was approximately $119 million at September 30, 2000.
About the Companies
Unitrin’s subsidiaries are engaged in three businesses: property and casualty insurance, life and health insurance and consumer finance.
Curtiss-Wright Corporation is a diversified provider of highly engineered products and services to the Motion Control, Flow Control and Metal Treatment industries. More Information on Curtiss-Wright can be found on the Internet at www.curtisswright.com.
Certain statements made in this news release should be considered forward-looking information as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such forward-looking statements are not guarantees of future performance, and actual results may differ materially. Readers are directed to consider the risks and uncertainties in the Company’s business that may affect future performance and that are discussed in readily available documents, including the Company’s annual report and other documents filed by the Company with the Securities and Exchange Commission. No assurances can be given that the conditions to the transactions described above (including approval of the spin-off’s tax-free status by the Internal Revenue Service) will be satisfied or waived or that the results contemplated in any forward-looking statements will be achieved. The Company assumes no obligation to release publicly any revisions to any forward-looking statements as a result of events or developments subsequent to the date of this news release.
CONTACT: Unitrin, Inc.
Scott Renwick, 312/661-4930