BELOIT, Wis., Dec. 13, 2010 /PRNewswire-FirstCall/ -- REGAL
BELOIT CORPORATION (NYSE: RBC) today announced it has entered
into an agreement to acquire 100% of the stock and assets of the
Electrical Products Company ("EPC") from A.O. Smith Corporation
(NYSE: AOS). EPC manufactures and sells a full line of motors for
hermetic, pump, distribution, HVAC and general industrial
applications.
Total consideration for the transaction is approximately
$875 million, including $700 million of cash and approximately
$175 million in shares of Regal
Beloit common stock. Regal Beloit
expects the acquisition to add annual sales of over $700 million in the first full year following the
acquisition and to be accretive in the first full year following
the acquisition, excluding one-time transaction-related expenses
and purchase accounting adjustments. The majority of these expenses
will be incurred in the first quarter following the close of the
transaction. Closing will be subject to customary regulatory
approvals.
EPC is based in Tipp City,
Ohio. Operations include motor manufacturing facilities in
the United States, Mexico, China, and the United Kingdom.
This transaction represents the 7th announced acquisition for
Regal Beloit in 2010, all of which are consistent with the
company's stated objectives of acquiring businesses that
include energy efficiency technology, strengthen the
geographic footprint and offer a synergistic fit.
Key attributes of the EPC transaction include:
- Complementary product portfolio
- Leading technology for variable speed hermetic
applications
- Patent portfolio with nearly 150 patents
- Expansion of the company's global manufacturing
capabilities
- Targeted synergies of $30 million to $40
million achieved over 3 to 4 years
- Future tax benefits related to the deductibility of goodwill
and intangible asset amortization, projected to have an estimated
present value of at least $45 million to $55
million
Henry Knueppel, CEO and Chairman
of Regal Beloit commented, "This is a defining acquisition for
Regal Beloit. We believe that this acquisition achieves all three
criteria of our acquisition strategy. Equally important, we are
looking forward to welcoming the outstanding employees of EPC to
our Company. EPC adds exciting new technologies, enhances
geographic presence, and drives significant synergies. Furthermore,
the transaction is expected to be accretive, excluding
non-recurring items and purchase accounting adjustments, the
majority of which are expected to occur in the first quarter
following the close of the transaction. This transaction provides
us with a more complete product and technology portfolio, which
will allow us to add value for our customers."
Paul Jones, CEO and Chairman of
A.O. Smith commented, "Regal
Beloit will be a tremendous steward for our business and we believe
that Regal Beloit is a good cultural fit for the EPC organization.
This transaction will benefit all of our
stakeholders."
Regal Beloit will be holding a
conference call to discuss this acquisition at 9:00 AM CST (10:00 AM
EST) on Monday, December 13,
2010. To listen to the call via the internet, please
go to http://www.regalbeloit.com/ or at:
http://www.videonewswire.com/event.asp?id=75074. Individuals who
would like to participate by phone should dial 800-860-2442,
referencing Regal Beloit. International callers should dial
412-858-4600, referencing Regal Beloit. A telephone replay of
the call will be available through March 15,
2011 at 877-344-7529, conference ID 446851. International
callers should call 412-317-0088 using the same conference ID.
A webcast replay will be available for one year and can be
accessed at
http://www.regalbeloit.com/rbceventspresentations.htm.
Credit Suisse served as the exclusive financial advisor to Regal
Beloit.
About REGAL BELOIT CORPORATION:
Regal Beloit Corporation is a leading manufacturer of mechanical
and electrical motion control and power generation products serving
markets throughout the world. Regal Beloit is headquartered in Beloit, Wisconsin, and has manufacturing,
sales, and service facilities throughout the United States, Canada, Mexico, Europe and Asia. Regal Beloit's common stock is a component of the
S&P Mid Cap 400 Index and the Russell 2000 Index.
CAUTIONARY STATEMENT
Certain statements made in this press release are
"forward-looking statements" intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
based on management's expectations, beliefs, current assumptions
and projections. When used in this press release, words
such as "may," "will," "expect," "intend," "estimate,"
"anticipate," "believe," "should," "project" or "plan" or the
negative thereof or similar words are intended to identify
forward-looking statements. These forward-looking statements
are not guarantees of future performance and are subject to risks,
uncertainties, assumptions and other factors, some of which are
beyond our control, which could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. Those factors include, but are not limited
to:
- our ability to timely and successfully consummate the
acquisition of EPC, including the ability to satisfy all of the
conditions precedent to consummation of the transaction;
- our ability to timely and successfully realize the potential
synergies of the EPC transaction;
- economic changes in global markets where we do business, such
as reduced demand for the products we sell, weakness in the housing
and commercial real estate markets, currency exchange rates,
inflation rates, interest rates, recession, foreign government
policies and other external factors that we cannot control;
- unanticipated fluctuations in commodity prices and raw material
costs;
- cyclical downturns affecting the global market for capital
goods;
- unexpected issues, costs or liabilities arising from the
acquisition and integration of EPC and other acquired companies and
businesses, or the effects of purchase accounting that may be
different than expected;
- marketplace acceptance of new and existing products including
the loss of, or a decline in business from, any significant
customers;
- the impact of capital market transactions that we may
effect;
- the availability and effectiveness of our information
technology systems;
- unanticipated costs associated with litigation matters;
- actions taken by our competitors, including new product
introductions or technological advances, and other events affecting
our industry and competitors;
- difficulties in staffing and managing foreign operations;
- other domestic and international economic and political factors
unrelated to our performance, such as the current substantial
weakness in economic and business conditions and the stock markets
as a whole; and
- other risks and uncertainties described from time to time in
our reports filed with the U.S. Securities and Exchange Commission,
or SEC, which are incorporated by reference.
Shareholders, potential investors, and other readers are urged
to consider these factors in evaluating the forward-looking
statements and cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included
in this press release are made only as of the date of this press
release, and we undertake no obligation to update these statements
to reflect subsequent events or
circumstances. Additional information regarding these
and other risks and factors is included in Item 1A - Risk
Factors in our Annual Report on Form 10-K filed with the SEC on
March 2, 2010.
Corporate Offices
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200 State Street - Beloit, WI
53511-6254
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608-364-8808 - Fax:
608-364-8818
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Website:
www.regalbeloit.com
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SOURCE Regal Beloit Corporation