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Rohr Will Acquire Defense Firm Tolo


Defense and aerospace contractor Tolo Inc. said Thursday that it has agreed to be acquired by aircraft parts maker Rohr Inc. in an all-cash deal.

Terms were not disclosed, but sources said Rohr agreed to pay $24 million.

Rohr, which itself had been an acquisition target until the deal with an unidentified suitor fell through earlier this week, is buying Tolo to capture a patented manufacturing technology developed by Irvine-based Tolo. Tolo also supplies Rohr with a critical component used in one of the jet engine parts it makes.

Privately held Tolo is expected to post annual revenue of $25 million for its 1997 fiscal year ending Sept. 30 and has said it expects to boost annual sales to almost $75 million by the end of fiscal 1999.

President John Terranova said his company will continue to operate under its own name as a wholly owned subsidiary of Chula Vista-based Rohr.

The deal, which is expected to close next month, should not affect employment at Tolo, which has been growing steadily in recent years after riding out the defense industry recession of the 1980s. Tolo has added 80 employees in the last two years and now boasts a work force of 220.

Terranova said Tolo has been approached several times in recent years by potential buyers.

Company officials decided to talk to Rohr, he said, "because we have now reached the point where we had to look at going public or being acquired in order to gain the funds to finance our continued growth."

Rohr, which approached Tolo about four months ago, was negotiating the purchase even as it was being sought itself by another defense company, reportedly either Boeing Co. or Lockheed Martin Corp.

Terranova said Tolo wasn't told of the possible sale of Rohr until that deal fell through. "We weren't aware they were being squired by a suitor of their own," he said.

Rohr designs, makes and markets aircraft engine components and noise-suppression systems for large commercial aircraft. The company reported fiscal 1997 revenue of $944 million.

Rohr shares closed up $1.13 at $28.75 in New York Stock Exchange trading.

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