Harmon Industries Completes Acquisition Of Servo Corportation Of America's Transportation Division

BLUE SPRINGS, Mo. (Wednesday, December 21, 1994) -- Harmon Industries, Inc. today announced the company has completed the acquisition of the transportation division of Servo Corporation of America, headquartered in Hicksville, N.Y. The transaction includes 260,000 shares of restricted Harmon common stock and approximately $7 million cash.

Servo's transportation division manufactures hot box detector systems and various components to help railroads monitor the condition of bearings and wheels on freight and passenger vehicles. Annual sales in recent years have averaged more than $10 million, with a significant portion of sales coming from international business.

"Servo is an internationally recognized leader in its field, and fits Harmon's strategic objectives to broaden our product scope in signal and train control, and to grow in international markets," said Björn; Olsson, Harmon's president and chief operating officer.

The acquisition will enhance Harmon's product and market positions by adding substantial technical expertise, active customer programs, especially in acoustic bearing defect detection, and further expertise in systems integration. Especially important for Harmon's international growth, Servo's established international distribution channels will create additional opportunities for Harmon to distribute its products overseas.

The positive financial impact from the acquisition won't be fully felt in 1995 because of manufacturing relocation, acquisition costs and other one-time expenses.

The division's manufacturing unit will relocate to Riverside, Calif. and combine manufacturing efforts with Harmon subsidiary Electro Pneumatic Corporation (EPC). Harmon will also open an office in Long Island, N.Y. for sales, product management and engineering staff.

Harmon Industries, Inc., trades on the Nasdaq Stock Market under the symbol "HRMN." For further information, please contact Charles M. Foudree, executive vice president - finance and chief financial officer, Harmon Industries, Inc., 1300 Jefferson Court, Blue Springs, MO 64015. The telephone number is (816) 229-3345.

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