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Remy International to Sell Diesel Remanufacturing Business of Franklin Power Products, Inc. and International Fuel Systems to Caterpillar Inc.

February 7, 2007

ANDERSON, IN – Remy International, Inc. has signed an agreement for the sale of its light and medium truck diesel engine and component remanufacturing business conducted by Franklin Power Products, Inc., and International Fuel Systems to Caterpillar Inc., for a cash purchase price of $150 million. The purchase price is subject to adjustment for net investment in the business, including working capital, at closing. The transaction is subject to customary closing conditions, and is expected to close before the end of the first quarter of 2007.

The first $50 million of proceeds from the transaction will be held in a restricted account, pledged as collateral to the company’s senior lenders and available for withdrawal only with consent of the lenders under the company’s senior credit facility. Next, the proceeds will be used to pay down outstanding revolver borrowings at the time of the closing under the company’s senior secured revolving credit and term loan facility, and the revolving lender commitments under the facility, currently $160 million, will be reduced by $40 million.

Any remaining proceeds also will be held in the restricted account and generally will be available for use by the company for capital expenditures, to repay revolver borrowings (with a corresponding reduction in the revolver commitment), and general corporate purposes.

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