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Press Release

Badger Meter Signs Agreement to Acquire Racine Federated, Inc.

For Immediate Release:         
January 2, 2012

Contact Information:               
Joan Zimmer
(414) 371-5702                     

Milwaukee, Wis., January 3, 2012 – Badger Meter, Inc. (NYSE: BMI) today announced it has signed a definitive agreement to acquire Racine Federated, Inc. of Racine, Wis., and its subsidiary located in Thetford, England, for approximately $57 million in cash.   Racine Federated manufactures and markets flow meters for the water industry, as well as various industrial metering and specialty products.  Combined sales for Racine Federated are estimated to be approximately $43 million in 2011.  

According to Richard A. Meeusen, chairman, president and chief executive officer of Badger Meter, the acquisition of Racine Federated gives Badger Meter several new flow measurement technologies, strong brands, a robust distribution channel and skilled employees.

"Building on our acquisitions of Cox Flow Measurement in 2010 and Remag in early 2011, the acquisition of Racine Federated will significantly expand Badger Meter’s global flow measurement business. It gives us a broader and deeper product line and an established customer base. It also provides opportunities for future growth and international expansion," said Meeusen.

"Racine Federated offers its customers a wide range of flow measurement products. With approximately 40% of its business in water-related markets and 60% in markets including industrial, oil and gas, municipal and energy management, Racine Federated is an excellent addition to Badger Meter.  The company has an outstanding reputation in the industry, a strong management team and an experienced workforce,” added Meeusen.

John Erskine Jr., chairman of Racine Federated, said, “The combination of Racine Federated and Badger Meter will bring many benefits to our customers, including a broader range of flow measurement technologies, products and capabilities. We look forward to continuing to grow the business as part of Badger Meter.”

Racine Federated employs approximately 120 workers at its facility in Racine, Wis.  The Racine Federated management team will remain with the company.

Meeusen said the acquisition is expected to be accretive to earnings during the first full year of ownership.  The transaction is expected to close in the first quarter of 2012, subject to customary closing conditions.

About Racine Federated, Inc.

Racine Federated is a private company founded in 1970 in Racine, Wis. The company manufactures turbine, variable area, hydraulic testing, differential pressure, vortex shedding and ultrasonic flow measurement products under the trade names Blancett®, Dynasonics®, Flo-Tech™, Hedland®, Preso® and Racine™ Vortex.  The company also manufactures Wyco® brand hydraulic concrete vibrators for the construction and civic infrastructure industries.

About Badger Meter

Badger Meter’s core competency is flow measurement solutions.  The company is a leading manufacturer and marketer of products incorporating liquid flow measurement and control technologies developed both internally and with other technology companies.  Badger Meter products are used in a wide variety of applications, including water, oil and chemicals.

Certain statements contained in this news release, as well as other information provided from time to time by Badger Meter, Inc. (the “Company”) or its employees, may contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “think,” “should,” “could” and “objective” or similar expressions are intended to identify forward looking statements.  All such forward looking statements are based on the Company’s then current views and assumptions and involve risks and uncertainties that include, among other things:

  • the continued shift in the Company’s business from lower cost, manually read meters toward more expensive, value-added automatic meter reading (AMR) systems, advanced metering infrastructure (AMI) systems and the new advanced metering analytics (AMA) systems that offer a complete solution to customers’ metering needs;
  • the success or failure of newer Company products;
  • changes in competitive pricing and bids in both the domestic and foreign marketplaces, and particularly in continued intense price competition on government bid contracts for lower cost, manually read meters;
  • the actions (or lack thereof) of the Company’s competitors;changes in the Company’s relationships with its alliance partners, primarily its alliance partners that provide AMR/AMI connectivity solutions, and particularly those that sell products that do or may compete with the Company’s products;
  • changes in the general health of the United States and foreign economies, including to some extent such things as the length and severity of global economic downturns, the ability of municipal water utility customers to authorize and finance purchases of the Company’s products, the Company’s ability to obtain financing, housing starts in the United States, and overall industrial activity;
  • the timing and impact of government programs to stimulate national and global economies;
  • changes in the cost and/or availability of needed raw materials and parts, such as volatility in the cost of brass castings as a result of fluctuations in commodity prices, particularly for copper and scrap metal at the supplier level, foreign-sourced electronic components as a result of currency exchange fluctuations and/or lead times, and plastic resin as a result of changes in petroleum and natural gas prices;
  • the Company’s expanded role as a prime contractor for providing complete AMR/AMI/AMA systems to governmental entities, which brings with it added risks, including but not limited to, the Company’s responsibility for subcontractor performance, additional costs and expenses if the Company and its subcontractors fail to meet the timetable agreed to with the governmental entity, and the Company’s expanded warranty and performance obligations;
  • the Company’s ability to successfully integrate acquired businesses or products;changes in foreign economic conditions, particularly currency fluctuations in the United States dollar, the Euro and the Mexican peso;
  • the loss or disruption of certain single-source suppliers; and,
  • changes in laws and regulations, particularly laws dealing with the use of lead (which can be used in the manufacture of certain meters incorporating brass housings) and the United States Federal Communications Commission rules affecting the use and/or licensing of radio frequencies necessary for AMR/AMI/AMA products.

All of these factors are beyond the Company’s control to varying degrees.  Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward looking statements and are cautioned not to place undue reliance on such forward looking statements.  The forward looking statements made in this document are made only as of the date of this document and the Company assumes no obligation, and disclaims any obligation, to update any such forward looking statements to reflect subsequent events or circumstances.

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