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WD-40 Co. To Acquire Heartland Corp.

May 10, 2002
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SAN DIEGO--(BUSINESS WIRE)--May 9, 2002--WD-40 Co and Heartland Corp. today announced they have signed a definitive purchase agreement in which WD-40 Co. will acquire Heartland Corp., makers of Spot Shot, an aerosol carpet spot remover.

The purchase price of approximately $47 million will be funded through a combination of cash, stock and debt. The debt will comprise of a term loan from Prudential Capital Group, an institutional investment division of Prudential Financial. Another portion of the proceeds will be financed with cash and from our revolving credit facility with Union Bank of California. The stock portion will be valued at $12 million.

The company expects to complete the purchase of Heartland Corporation by the end of business on May 31.

The company intends to reduce the regular quarterly dividend from 27 cents to 20 cents per share in the 3rd quarter fiscal 2002 contingent on the closing of the Heartland Corp. acquisition.

"As we have stated in the past, we will lower our dividend payout when the right opportunity came along to enhance shareholder value," said Garry O. Ridge, president and CEO of WD-40 Co. "The Heartland Corporation acquisition is another step in enhancing shareholder value.

"This acquisition is a perfect fit for our fortress of brands platform. Spot Shot is a leading brand in the carpet spot remover category, a highly effective product with great opportunities for growth in the U.S. and around the world," Ridge said.

"Spot Shot's current brand development bears a striking resemblance to the early days of our WD-40 product. The similarities in both business models in outsourced manufacturing and multi-trade channel distribution will enable us to absorb the operation with minimal impact," Ridge said. "This is a brand that not only fits well within our brand portfolio but will flourish under the care of WD-40 Company as we continue to develop its brand awareness worldwide."

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