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April 7, 2005

Rexnord Corporation, Milwaukee, WI, has entered into a definitive agreement to purchase the Falk Corporation from Hamilton Sundstrand, a subsidiary of United Technologies Corporation for $295 million. The combined companies will have revenues over $1 billion. The transaction is expected to close in the second quarter of 2005.

For most distributors MDM contacted regarding the deal, there is a mixture of hope and apprehension depending on which products you sell. While Rexnord provides a broad commodity line of products, Falk offers some larger specialty products with attractive margins through selective channels. As one long-time (and perhaps jaded?) distributor told MDM: "It seems to take manufacturers three years to make any changes on acquisitions, so we'll have to wait and see how it impacts us. But it could be a big positive if it's managed right."

Rexnord Corporation is a worldwide manufacturer of mechanical power transmission components with revenues of approximately $800 million. Falk Corporation, also headquartered in Milwaukee, is a manufacturer of gears and couplings, with annual revenues of approximately $200 million.

"By combining two successful companies that have complementary products and technologies, we create a bigger, stronger business, with combined annual revenues in excess of $1 billion," said Robert Hitt, Rexnord CEO. "This acquisition is consistent with Rexnord’s growth strategy, enhancing our capabilities and enabling us to better serve our customers."

"Falk Corporation has a strong market position, with substantial brand equity and a significant installed base," said Dave Doerr, Falk president. "Falk looks forward to joining with Rexnord to offer our customers the best solutions to their power transmission needs."

About Rexnord Corporation
Rexnord Corporation is a 114-year-old company with 4,800 employees located at more than 30 manufacturing facilities worldwide. Rexnord is a global manufacturer of industrial power transmission components. The company manufacturers gears, couplings, flattop and industrial chain, industrial bearings, aerospace bearings and seals, and a variety of special components.

Rexnord’s products are used in plants and equipment in a wide range of industries, including forest products, mining, construction equipment, cement, food and beverage, energy, and aerospace. It markets its products around the world through a network of service centers and warehouses, backed by hundreds of distributors. For more information, visit www.rexnord.com.

About Falk Corporation
Falk Corporation is a 113-year-old global manufacturer of industrial power transmission solutions. Falk leverages its legacy in power transmission solutions to provide unmatched service and support to customers anywhere in the world. Its broad line of power transmission products includes standard and engineered gear drives, mill products, couplings, and service and repair.

Falk has distributor locations and production facilities in the U.S., Canada, Mexico, Brazil, China, and Australia. Falk services a diverse set of customers in industries such as aggregate, cement, coal, metal processing, mining, paper, and power generation. For more information, visit www.falkcorp.com.

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