MDM News Digest 3413

Prophet 21, Yardley, PA has acquired Dynamic Data Systems, Inc., the provider of Turns, an enterprise software solution for medical products distributors and other distributors in other vertical markets. This is the fourth acquisition by Prophet 21 since June 2003. 'Prophet 21 has a two-pronged growth strategy,' said Chuck Boyle, Prophet 21 president and CEO. 'As we continue to successfully grow organically - adding more new distributor customers each year - we are also increasing our customer base through acquisition. Dynamic Data Systems is a powerful force in the medical products distribution market along with other vertical markets.'

Ingersoll-Rand Company Limited, Hamilton, Bermuda, sold its Drilling Solutions business unit to Atlas Copco AB, headquartered in Stockholm, Sweden, for approximately $225 million. The transaction includes production facilities in Garland, TX; Roanoke, VA; Yokohama, Japan; and Xuan Hua, China; and Ingersoll-Rand Equipment Stores in Knoxville and Nashville, TN; and Clarks Summit, PA. Also, the transaction includes Drilling Solutions assets held by Ingersoll-Rand (India) Limited, subject to approval by the shareholders of the Indian company, which is expected in the third quarter of 2004. The transaction does not include Ingersoll-Rand's France-based Montabert business unit, which manufactures hydraulic rock-breaking equipment. 'This divestiture has significant strategic and symbolic importance for our company,' said Herbert L. Henkel, chairman, president and CEO. 'Strategically, it improves our ability to invest in opportunities that enhance our core product lines, recurring-revenue stream, and geographic reach.

Guardair Corporation, Chicopee, MA, acquired the assets of Nortech Corporation, Midland Park, NJ. A manufacturer of pneumatic powered vacuums since 1959, Nortech will operate as a division of Guardair Corporation and will be based at Guardair's Chicopee, MA headquarters. The Nortech product line includes more than 20 different vacuum models in addition to a complete set of accessories and options. The Nortech acquisition complements Guardair's pneumatic tool business and provides additional opportunities for its existing product line in the industrial cleaning market. Guardair manufactures safety air guns, spray equipment and accessories for sale into the industrial MRO market. In 1999, Guardair acquired the assets of Allpax Gasket Cutter Products, Inc., the largest U.S. manufacturer of gasket cutters, hollow punch tools and accessories.

The worldwide Control Valve market, which totaled nearly $2.9 billion in 2003, will reach nearly $3.4 billion by the end of 2008, expanding at a cumulative annual growth rate exceeding 3 percent, according to a new study by the ARC Advisory Group. 'Long-term business prospects for control valve suppliers look reasonably bright due to MRO business opportunities in developed regions and new projects' business in developing countries,' according to Senior Analyst Dave Clayton, author of ARC's Control Valve Worldwide Outlook. See article on p. 4 of this section.

A jury in federal district court in Tyler, Texas has awarded Halliburton Energy Services damages of $24 million in a patent infringement case filed against Smith International, Cause No. 4:02CV269, Halliburton Energy Services, Inc. v. Smith International, Inc. filed in the U.S. District Court for the Eastern District of Texas, Sherman Division. The case involved one of the company's three-cone drill bit product lines called IDEASTM. The plaintiff claimed these drill bits infringed certain of the plaintiff's patents. The company's other three-cone drill bits and diamond drill bits were not involved in this litigation. The jury found that the company infringed the claims asserted by the plaintiff and that certain of the infringements were willful. Therefore, the court may increase the damages, in its

discretion, up to three times the amount found by the jury. See article on p. 4 of this section.

Timken Alloy Steel Europe Limited, a subsidiary of The Timken Company, announced it would increase base prices on steel tubing by a minimum of 7.5 percent. These price increases apply to all tubing dispatched from July 1, 2004. Raw material surcharges will continue to be levied at the rates ruling at date of dispatch.

Parker Hannifin Corporation, Cleveland, OH, reported orders for the month of June for the North American Industrial businesses increased 24 percent over the same month last year, while Rest-of-World Industrial orders increased 21 percent. In the Climate and Industrial Controls business (CIC), order rates were two percent lower, and orders at Parker Aerospace were 15 percent higher compared with last year. In the North American Industrial units, orders from original equipment manufacturers remain robust while strength in industrial distribution continues. In Rest-of-World Industrial, all regions continue to report year-over-year increases. Activity in CIC was relatively unchanged from last month.

Sergio Nevarez was named director general of Applied Mexico, the Mexican subsidiary of Applied Industrial Technologies, Cleveland, OH. Nevarez will oversee operations at all nine Applied Mexico locations; he will be based in Chihuahua. Nevarez worked previously as director of sales and operations for Applied Mexico. He joined Applied with the November 2003 acquisition of Rodamientos y Bandas de la Laguna, S.A. de C.V. (Rybalsa), a distributor of bearings, power transmission products and hydraulic and industrial hoses. Nevarez founded Rybalsa in 1985 after working for eight years in the power transmission industry. 'With his 27 years of power transmission experience, Sergio brings the industrial products and geographic market expertise needed to head our healthy and growing Mexican organization,' said Todd Barlett, vice president of global business development for Applied. 'Since the addition of Rybalsa, Applied Mexico significantly expanded its ability to serve our multinational customers in Mexico.' Applied Mexico operates service centers in Mexico City, Monterrey, Saltillo, Guadalajara, Chihuahua, Cuidad Juarez, Hermosillo, Cananea and Nacozari.

Strategic Distribution, Inc., Bensalem, PA, a provider of MRO supply chain management services, announced the appointment of Cris G. Ferregur, as general manager of Strategic Distribution de Mexico (SDM), the company's Mexican subsidiary. Headquartered in Juarez, Chihuahua, Mexico, SDM is the largest on-site integrated supplier in Mexico. Ferregur will oversee all management aspects of SDM, from generating new business by securing long-term contracts to day-to-day operations, expanding on SDI's leading position in Mexico. He is taking over responsibilities of F.M. 'Duffy' Shea, who left to pursue other opportunities. Prior to joining SDI, Ferregur served as the vice president of sales and marketing for a mid-sized integrated supplier that specialized in the aerospace industry. He also worked for the Norton Company's Saint Gobain Corporation (Worcester, MA) for more than 14 years. Based in Mexico City, Ferregur served as the national sales manager for the Saint-Gobain Abrasives division.

Economic activity in the manufacturing sector grew in June for the 13th consecutive month, while the overall economy grew for the 32nd consecutive month, say the nation's supply executives in the latest Manufacturing Institute for Supply Management Report On Businessﾮ. ISM's PMI registered 61.1 percent in June, a decrease of 1.7 percentage points when compared to 62.8 percent in May. ISM's New Orders Index declined 2.8 percentage points from 62.8 percent in May to 60 percent in June. ISM's Production Index decreased 1.6 percentage points from 64.8 percent in May to 63.2 percent in June. The ISM Employment Index is at 59.7 percent for June, a decrease of 2.2 percentage points when compared to the 61.9 percent reported in May.