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s higher-efficiency boilers, as more commercial customers seek ways to save energy and reduce operating costs, Rajendra pointed out. This opportunity becomes even more compelling when we couple LOCHINVAR'

s leading technology with AO SMITH'

s many years of experience, strong water heater manufacturing platform and prominent brand in China. LOCHINVAR represents an excellent fit because of their complementary products and commitment to product engineering and technology leadership, Rajendra observed. And, they share our commitment to the highest levels of product quality and customer satisfaction. The LOCHINVAR plant and technical facility in Lebanon, Tenn., are best-in-class operations, and we are excited about the future for this campus. LOCHINVAR has built a strong team internally and a strong group of sales representatives. We are enthused about their becoming part of the AO SMITH team. William L. Vallett, Jr., chief executive officer and president of LOCHINVAR, commented, We are extremely excited about the potential benefits of combining with such a logical partner like AO SMITH and the future prospects for our employees, customers and suppliers. Highlights of the transaction: Access to higher growth, energy efficient technology and product line expansion: Pro forma AO SMITH sales in

2010 increase

12 percent to approximately $1.7 billion, based on LOCHINVAR'

s sales of approximately $180 million. LOCHINVAR'

s sales have grown at a rate of eight percent for the last five years, and A. O. SMITH'

s management believes that this growth rate will continue for........