RBC Raises Debt to Fund Acquisition - Analyst Blog
16 7월 2011 - 3:30AM
Zacks
Regal Beloit
Corporation (RBC) recently issued senior unsecured notes
worth $423 million in a private placement. In addition, the company
expects to issue senior unsecured notes of $77 million in the near
term.
The company will divide the issue
into seven portions, with maturity ranging from seven to twelve
years and fixed interest rates ranging from 4.09% to 5.09%.
Regal Beloit intends to utilize the
proceeds to fund the acquisition of Electrical Products Company
("EPC") from A.O. Smith Corporation (AOS).
Last year, the company agreed to
acquire 100% of the stock and assets of EPC from A.O. Smith for
approximately $875 million. Of the total consideration, $700
million will be paid in cash and balance in shares of Regal Beloit
common stock.
Based in Tipp City, Ohio, EPC
manufactures and sells a full line of motors for hermetic, pump,
distribution, heating, ventilation and air conditioning (HVAC) and
general industrial applications.
Management believes that EPC's
product portfolio is complementary to Regal Beloit's and has
targeted synergies of $30 million–$40 million, spanning over three
to four years from this acquisition.
As a consequence of the merger, the
company expects to add approximately $700 million to the top line
and increase earnings per share (excluding one-time items) in the
first full year following the acquisition.
Regal Beloit continues acquiring
businesses with its focus on energy efficiency technology,
strengthening its geographic footprint and offering a synergistic
fit.
Headquartered in Beloit, Wisconsin,
Regal Beloit manufactures mechanical and electrical motion control
and power generation products.
SMITH (AO) CORP (AOS): Free Stock Analysis Report
REGAL BELOIT (RBC): Free Stock Analysis Report
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