Snap-on and CIT are partners of Snap-on Credit LLC, which offers a wide range of financial services to U.S. franchisees and Snap-on customers. The joint venture was established in 1999 and CIT was the exclusive purchaser of Snap-on Credit`s financing contracts. Snap-on and CIT are in talks for a new, longer-term joint venture agreement. Both sides agreed to continue these discussions. To the extent that an agreement acceptable to both parties can be reached, including the longer-term solution to liquidity problems per cit, it is possible that the parties may subsequently conclude a new joint venture agreement. KENOSHA, Wis.-(BUSINESS WIRE) –Snap-on Incorporated (NYSE: SNA), a leading innovator in the world, Manufacturer and distributor of tools, diagnostics, devices, software and service solutions for business users, today announced that it has notified CIT of the termination of the corporate agreement between CIT and Snap-on regarding the parties` Snap-on Credit LLC joint venture, in accordance with Snap-on`s termination rights under the Agreement. Following this termination, Snap-on will acquire CIT`s stake in the joint venture for approximately $8.2 million, Snap-on Credit will be a 100% subsidiary of Snap-on Incorporated and Snap-on Credit will continue to serve CIT`s existing contractual portfolio. The approximate outstanding amount of this portfolio is $834 million.
Snap-on is not required to acquire the existing portfolio of contracts held by CIT. Snap-on Credit`s business is expected to be uninterrupted as a result of this event, and all activities related to the financing of extended credit agreements to customers, the leasing of store equipment and loans to franchisees will continue unchanged. For the new contracts, Snap-on Incorporated will provide the funding. Over the next 12 months, Snap-it is estimated that this additional funding will require approximately $450 million. Snap-on believes that it has sufficient financial resources to fully meet Snap-on Credit`s funding needs, including: for more information, see www.snapon.com. Snap-on also expects to continue its regular quarterly cash dividend of $US 0.30 per share, subject to the Board`s regular definition. Since 1939, Snap-on has paid successive quarterly dividends in cash, without interruption or reduction. statements contained in this press release, which do not constitute historical facts, including statements (i) that are in the form of the future; (ii) contain the words « expected », « anticipated », « intentional », « approximate » or similar words referring to Snap-on or its management; (iii) are expressly identified as future-oriented; or (iv) describe the future prospects, plans, estimates, objectives or objectives of Snap-on or management, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Snap-on draws the reader`s attention to the fact that this press release contains forward-looking statements developed in good faith by management and which are therefore subject to risks and uncertainties about Snap-on`s expected results, which could (and, in some cases, have resulted in) actual results materially devious of the results described or contemplated in the forward-looking statements. Factors that could cause the Company`s actual results to differ materially from those of the forward-looking statements include the announcement of the Company`s reports to the Securities and Exchange Commission, including information under the headings « Safe Harbor » and « Risk Factors » in its Annual Report on Form 10-K for the year ended January 3. 2009 and under « Management`s Discussion and Analysis of Financial Condition and Results of Operations – Caution Regarding-Looking States » in its quarterly report on Form 10-Q for the period of the quarter to April 4, 2009, which are inserted by reference.
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