January 1977 - Maritime Reporter and Engineering News

Walter Kidde To Sell U.S. Lines To WUI, Inc.

Walter Kidde & Company, Inc. and WUI, Inc. have announced that an agreement in principle has been reached for the sale of U.S. Lines, Inc. to WUI. Under the terms of the proposed sale, Kidde is to receive $70 million in cash and a $27-million subordinate note of U.S. Lines bearing 10 percent annual interest. At the closing, Kidde will also own a new U.S. Lines voting preferred stock convertible into 20 percent of U.S. Lines common stock and paying dividends equal to 20 percent of the net income of U.S. Lines.

Dividends are to be paid quarterly. Kidde will have the right from January 1, 1978, through December 31, 1982, to sell the preferred stock to WUI for $5 million, and WUI will have the right during this period to purchase this stock from Kidde at the same price. This transaction would result in Kidde receiving consideration of not less than $102 million.

The purchase of U.S. Lines is subject to execution of a final agreement between Kidde and WUI, the completion of necessary substantial financing arrangements, and the obtaining of approvals from governmental agencies.

WUI, located at One WUI Plaza, New York, N.Y. 10004, is the parent company of Western Union International, one of the three major U.S. international communications carriers, which provides full service record communications to and from the U.S.

on a worldwide basis. It is fully independent of, and not affiliated with The Western Union Telegraph Company. WUI, through its subsidiaries, Airsignal International and WUI/TAS, also furnishes domestic radio paging, mobile telephone and telephone answering services.

U.S. Lines operates a fleet of 38 vessels, primarily hauling containerized cargo on a worldwide basis. Its revenues in 1975 were just under $300 million, with net income of $10.5 million. It will continue to be operated by its existing management.

In 1975, WUI had operating revenues of approximately $86 million with net income in excess of $7.3 million. For the first nine months of 1976, WUI reported record revenues of $71.6 million and record net income of over $6 million.

Kidde is listed on the New York Stock Exchange; WUI is listed on the American Stock Exchange.

Other stories from January 1977 issue


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