NEWS RELEASE                                   SEPTEMBER 2011

Industrial Valve Market to Hit $53 Billion Next Year

The world market for industrial valves will increase by a modest 5 percent to reach $53 billion in 2012 on its way to $60 billion in 2015.  This is the latest forecast in the continually updated Industrial Valves: World Markets published by the McIlvaine Company.

Asia will be the biggest market followed by the Americas.

     Industrial Valve Revenues ($ Millions)

Continent                     2012

Africa                            2,718

America                       15,704

Asia                             20,598

Europe                         14,097

Total                            53,117

In Asia the market is driven by the extensive investments in heavy industry and infrastructure. Every new wastewater, power, chemical, steel, pulp or mining facility has a substantial investment in valves to control flow of liquids and gases.  Asia is also the leading investor in valves for manufacturing of various electronic products such as semiconductors, flat panel displays, solar panels and memory storage devices.

Valve sizes range from tiny flow control valves to the massive sub-sea designs made infamous by the gulf oil spill. These forecasts do not include valves used in residential applications nor do they include hydraulic valves.

There are continuing mergers and acquisitions which re-shape the industry. Here are some examples:

Vertical growth - Cameron has agreed to acquire LeTourneau Technologies Drillings Systems and Offshore Products divisions from Joy Global, Inc. for approximately $375 million in cash.

McJunkin Red Man Corporation - announced the acquisition of the operations and assets of the legacy distribution business of the Valve Systems and Controls unit of Curtiss-Wright Flow Control Corporation.

Divestiture - The Tyco Board of Directors has approved a plan to separate the company into three independent, publicly traded companies.  The three companies created through the separation will consist of:

• The ADT North America residential security business, North America’s leading provider of security for homes and small businesses;

• The world’s leading provider of flow control products and services;

• The world’s leading commercial fire and security business.

Horizontal growth - Rexnord will acquire one hundred percent of the outstanding stock of VAG Holding GmbH (“VAG”) for an estimated aggregate transaction value of €175 million. 

VAG is a global leader in the design and manufacture of valves and engineered solutions across a broad range of applications, including water distribution, wastewater treatment, dams and hydropower generation as well as various other industrial applications. The acquisition is highly complementary to Rexnord’s existing Water Management Platform with limited product overlap and virtually no geographic duplication. VAG employs approximately 1,200 associates worldwide and reported net sales of approximately €140 million for the twelve months ended June 30, 2011.

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