LIMERICK, Pa. (AP) -- Teleflex Inc., which makes engineered products and services for medical, aerospace and commercial markets, said Monday it has agreed to sell its power systems business to Fuel Systems Solutions Inc. for $14.5 million in cash.
The Limerick, Pa., company said it will take a $25 million charge in the second quarter to adjust the carrying value of the operations to the estimated fair value.
Teleflex also said that due to the global recession, $6.7 million in nontax deductible goodwill in its cargo container operations and $2.3 million for trade names in its marine operations were impaired.
Total charges of about $34 million will reduce results for the second quarter ended June 28, but will not have an impact on liquidity or compliance with debt agreements, Teleflex said. And it does not expect the sale of its power systems business, classifying it as discontinued operations or the charges to have a material effect on its previously announced 2009 earnings per share from continuing operations.
In June, Teleflex reaffirmed its 2009 guidance of $3.25 per share to $3.55 per share excluding special charges.
Analysts surveyed by Thomson Reuters expect earnings to be $3.38 per share. Analysts typically do not account for special charges.
Teleflex has scheduled the release of its second quarter results before the market opens July 27.
Mariano Costamagna, CEO of Fuel Systems Solutions, said Teleflex's alternative fuel components and systems business unit complements the company's global transportation and industrial businesses. The auxiliary power systems business and anti-idling auxiliary units that generate power for parked trucks and diesel locomotives will broaden Fuel System's target markets, he said.
Matthew Beale, Fuel Systems' president and chief financial officer, said the company expects the purchase to "mildly" add to earnings this year, "with greater contribution" beginning in 2010.
Shares fell $1.11, or 2.4 percent, to $44.53 in midday trading. Shares of Fuel Systems Solutions, based in Santa Ana, Calif., rose 30 cents to $22.41.
