Cummins Selling Exhaust Business to Global Tube

January 25, 2011

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Cummins has entered into an agreement to sell its exhaust business to Global Tube so Cummins Emission Solutions can put a greater emphasis on products that are critical to its growth strategy, such as diesel particulate filters and selective catalytic reduction systems.

Global Tube is a portfolio company of Wind Point Partners, a private equity firm headquartered in Chicago. The sale to Global Tube affects Cummins' acoustic exhaust operations in Stoughton, Arcadia, Black River Falls and Viroqua, all in Wisconsin, as well as in Scoresby, Australia, and Daman, India.

Terms of the deal were not disclosed. Cummins' exhaust operations make products such as bent tubes and small mufflers. It's part of the company's Emission Solutions business, which specializes in providing a range of aftertreatment solutions and technologies to control emissions in diesel engines.

The sale will allow Cummins Emission Solutions to place greater emphasis and resources on manufacturing products that are a critical part of Cummins' growth strategy. Ever-tightening global emission standards provide Cummins with significant growth opportunities in the development and deployment of aftertreatment technology, notes the company.

For example, Cummins Emission Solutions produces the Diesel Particulate Filter and the Selective Catalytic Reduction systems that are critical to Cummins meeting stringent new emissions regulations for on-highway diesel engines mandated by the Environmental Protection Agency in 2010. As other countries adopt tighter emissions standards in the future, Cummins expects significantly higher demand for products made by CES - both on Cummins engines and on those engines produced by other companies.

"It is more important than ever for CES to focus on our core business of providing aftertreatment systems and solutions for commercial vehicles," said Srikanth Padmanabhan, Vice President and General Manager - Cummins Emission Solutions. "Selling the exhaust business to a strong buyer like Global Tube will enable us to focus on developing the technologies that will allow CES to continue growing in this vital market."

"This is a very exciting opportunity for us to invest in a business which is central to our strategy and has significant opportunity for growth," said Thomas Gosnell, Chief Executive Officer of Global Tube. Gosnell, a former executive with ArvinMeritor and Rockwell Automotive and 30 year veteran of the Commercial Vehicle industry, has said that the new business will revive the name Nelson Products, with its headquarters in Stoughton, Wis. Nelson is a familiar name in the exhaust business which will be revitalized under the new ownership.

The exhaust business is expected to transfer to Global Tube by the end of March

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