Snap-on Terminates Joint Venture Operating Agreement with CIT

Snap-on Incorporated, a leading global innovator, manufacturer and marketer of tools, diagnostics, equipment, software and service solutions for professional users, announced that it has notified CIT of termination of the operating agreement between CIT and Snap-on relating to the parties’ Snap-on Credit LLC joint venture, pursuant to Snap-on’s rights to terminate under the agreement.

Snap-on and CIT are partners in Snap-on Credit LLC, which provides a broad range of financial services to Snap-on’s U.S. franchisees and customers. The joint venture was established in 1999 and CIT has been the exclusive purchaser of the financing contracts originated by Snap-on Credit. Snap-on and CIT have been in ongoing discussions concerning a longer term new joint venture agreement.

Both parties have agreed to continue these discussions. To the extent a mutually acceptable agreement can be reached, including CIT resolving its liquidity issues over a longer term, it is possible the parties could, at a later date, enter into a new joint venture agreement.

As a consequence of this termination, Snap-on will acquire CIT’s interest in the joint venture for approximately US$8.2 million, Snap-on Credit will become a wholly owned subsidiary of Snap-on Incorporated, and Snap-on Credit will continue to service the existing portfolio of contracts owned by CIT. The approximate outstanding balance of this portfolio is US$834 million.