Cummins to buy $25M of Irwin stock

October 14, 2008
Engine maker Cummins Inc. said Tuesday it will buy $25 million of stock of Irwin Financial Corp. to support the Columbus bank's restructuring plan.

The investment is contingent upon regulatory approval of the purchase and the restructuring plan, a Cummins spokesman said.

Irwin Financial said earlier this month that it planned to raise a total of $50 million in capital. Cummins said the remaining $25 million in new capital will come from individual investors.

Cummins said the share purchase is both a good investment given the stock's "attractive" price and a vote of confidence in Irwin Financial's management.

"Given all the chaos in the financial markets, Cummins wants to help ensure that IFC's restructuring plan works," said Tim Solso, Cummins chairman and chief executive, in a statement.

Shares of Cummins fell $2.49, or 6 percent, to $36.56 in late morning trading, while Irwin shares slipped 9 cents, or 3 percent, to $3.

Cummins and Irwin long have had close ties.

In 1919, the son of Irwin's founder
backed inventor Clessie Cummins when he launched the engine maker.

If Cummins makes the investment in Irwin, Irwin CEO Will Miller will resign from Cummins' board.

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