Regal Beloit Proceeds with Acquisition - Analyst Blog
19 8월 2011 - 2:27AM
Zacks
Regal Beloit Corporation (RBC) has received the green
signal from the U.S. Department of Justice to proceed with the
acquisition of 100% of the stock and assets of Electrical Products
Company ("EPC") from A.O. Smith
Corporation (AOS).
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.
In order to
obtain the above approval, Regal Beloit had to comply with the
conditions of antitrust settlement. Thus, the company entered into
an agreement with SNTech Inc. to dispose its existing U.S. focused
pool and spa motor business, excluding the pool and spa motor
business of EPC.
The company expects to close the acquisition of EPC and the
divesture of U.S. focused pool and spa motor business by August 22,
2011.
Furthermore, Regal Beloit will sell EPC
draft inducer designs, which are under development. The
Justice Department believes that without these divestitures, the
acquisition would result in higher prices, lower quality products,
less customer service and less innovation.
Regal Beloit recently issued senior unsecured notes in a private
placement to fund the acquisition of EPC.
Last year, the company had agreed to acquire 100% of the stock
and assets of EPC for approximately $875 million. The total
consideration for the acquisition now comprises $700 million of
cash and approximately $175 million in shares of Regal Beloit
common stock.
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.
This acquisition will be significant for the company, as it
would enable customers with new energy-saving products resulting in
meaningful synergies and expansion of Regal Beloit’s global
footprint.
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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