Frequently Asked Questions

1. Why is this acquisition in the best interest of Parker Hannifin's shareholders?
   • This combination positions us to be a leader in the fluid connectors and fluid transfer markets, with substantial growth opportunities both globally and in key niche markets. The transaction offers clear value creation benefits for shareholders, customers and employees. Parker has a great track record in creating value for its stakeholders, and the combination also supports Parker's overall systems strategy to offer the world's widest range of motion and control technologies.
   • Our respective market strengths complement one another. Dayco's Fluid Management Business (consisting of the fluid power and fluid transfer operations) offers rubber and thermoplastic hose products that fill voids in Parker's product line, strengthens the company's position in Australia and Canada and offers customers important one-stop shopping opportunities around the world.
   • The combination positions the companies to achieve meaningful growth in a supplier-rationalization environment by capitalizing on synergies and cross-selling opportunities. This would be more gradual and costly to pursue independently.
   • Parker will expand global sales of Dayco's Fluid Management products.
   • This is a perfect addition to Parker's total systems strategy. The acquired fluid power hose and assembly business is a classic-bolt-on acquisition to Parker's full array of fluid connectors. The fluid transfer business enables Parker to offer customers a broader offering of products critical to operations on the job site for several key niche markets including mining, petroleum, construction, injection molding and agriculture applications.
   • This combination enhances Parker's R&D capabilities by enabling cost-effective technology transfer between the fluid-power and fluid-transfer business. For example, economies of scale in procurement and manufacturing will allow both businesses to offer hose and fittings made from a wider variety of materials that will be compatible with a broader range of fluids and media.

2. Why have these companies agreed to this combination?
   • The companies are an excellent strategic fit
   • Consolidation has accelerated as customers demand global service. By combining forces, our companies will be favorably positioned with a leading market share to serve customers in this more competitive global environment.

3. When do you expect the transaction to close?
   • The transaction was completed October 19, 2001.

4. What are your plans for consolidating the two companies?
   • We're forming joint transition teams to begin to develop formal plans for integrating our systems and business processes.
   • An integration manager has already been named

5. Who are Parker's major customers? Who are Dayco Fluid Management's?
   • Parker serves more than 400,000 customers worldwide in a wide range of commercial, mobile, industrial, instrumentation and aerospace markets, and no singular customer currently is greater than about 3 percent of sales.
   • Dayco Fluid Management's major customers are in the mining, petroleum, construction, agriculture, forestry, industrial lawn and turf care, and industrial machinery markets.

6. Will the level of service provided to both companies' current customers be enhanced/suffer as a result of the merger?
   All customers can expect the same high level of service they have always received from both companies. Customers will benefit from the increased product and service offering, and the added global strength of the combined company.

7. Will there be any job reductions as a result of the merger?
   • Parker buys businesses with the intent to grow them. Dayco Fluid Management's previous owners, BC Partners, are divesting non-core operations and had been preparing this business for sale. Therefore, many operations had been downsized substantially prior to this transaction. The economy will dictate if job reductions are required.

8. Will Parker change the Dayco name?
   • Parker retains the right to use the Dayco name for a limited period of time. Parker retains the right to use leading product trade names associated with this brand, such as Coalmaster and Grizzly. However, as Dayco Fluid Management products are integrated into the Parker product line, whether or not to change their brand names are issues to be explored in integration planning on a case-by-case basis. The decision depends on the customers' perspectives, in terms of equity associated with the name.

9. Will there be new opportunities for both companies' employees in terms of jobs and relocation?
   • As part of a larger, dynamic, global company, employees should have increased opportunity. Operating assessments will be made during integration to determine the best prospects for growth and value creation. Parker has a track-record of successfully growing the businesses it acquires.

10. What are the terms of the transaction?
    • The terms were not disclosed.

11. What will happen to Dayco Fluid Management's leadership team in the transaction?
    • Parker intends to keep Dayco Fluid Management's local management team. They have a proven track record and valued relationships with local employees and customers.

12. How did this transaction begin?
    • BC Partners acquired Mark IV (Dayco Fluid Management's parent company) in September 2000. Soon after, BC Partners announced its intention to sell non-core operations. Dayco Fluid Management was one of the subsidiaries placed on the market.

13. What is the relationship between Parker and Dayco Fluid Management? Aren't the two companies competitors?
    • Dayco Fluid Management had carved out a leading position in fluid transfer products, which is new to Parker. Entering this market fits with Parker's strategy to offer the broadest array of motion and control systems. Dayco Fluid Management had developed highly specialized products for niche applications, for instance hose assemblies for underground mining applications, while Parker was serving a more general-application mining and construction equipment market. Parker and Dayco Fluid Management previously competed in a number of hydraulic hose product lines.

14. What happens to employee's current benefits and compensation?
    • Current benefits remain in place through Dec. 31, 2001
    • Education, transition and enrollment process for Parker benefit programs will occur during this period
    • Beginning Jan. 1, 2002, Dayco Fluid Management employees will be integrated into Parker's benefits program
    • Parker offers comprehensive, flexible benefits designed to meet family needs

15. Will Parker continue to support the local communities?
    • Parker has a long history of being a good corporate citizen and is active in the communities in which it operates.

16. What will happen to Dayco Fluid Management distributors?
    • Parker's immediate plans are to focus on product integration. Then Parker will integrate as many of the Dayco Fluid Management distributors as possible into the Parker network. Both Parker and Dayco Fluid Management distributors will benefit by having a broader product offering to serve a wider variety of markets.