BRIEF: A.O. Smith buys interest in Chinese firm

Thu. September 17, 2009; Posted: 02:50 PM

Sep 17, 2009 (Milwaukee Journal Sentinel - McClatchy-Tribune Information Services via COMTEX) -- AOS | Quote | Chart | News | PowerRating -- A.O. Smith Corp. (AOS) has signed an agreement to purchase a majority interest in the water treatment business of Tianlong Holding Co. Ltd. of Hong Kong.

A newly formed company, A.O. Smith (Shanghai) Water Treatment Products Co. Ltd., will hold the assets of the business and supply reverse osmosis (RO) water filtration products to the China residential and commercial markets as well as export markets throughout the world.

A.O. Smith will pay approximately $77 million for an 80% share of the new company. The investment will be funded out of A.O. Smith's existing cash flow and credit facilities, and the company is expected to earn in excess of its cost of capital in the first full year under A.O. Smith's ownership. The company says it expects to generate more than $100 million in sales within three years.

"We are excited about investing in the leading residential and commercial water purification company in China," said Paul W. Jones, chairman and CEO of the Milwaukee-based company. "Entering the water treatment industry has been an important strategic initiative for A.O. Smith, and, in Tianlong, we have an experienced and well regarded partner who understands the market."

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For full details on A O Smith Corporation (AOS) click here. A O Smith Corporation (AOS) has Short Term PowerRatings of 5. Details on A O Smith Corporation (AOS) Short Term PowerRatings is available at This Link.

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