Regal Beloit Corp. entered into a definitive agreement to acquire the Power Transmission Solutions business of Emerson Electric Co. for about $1.4 billion comprised of $1.4 billion in cash plus $40 million of assumed liabilities.
PTS engineers power transmission products and solutions. The business manufactures, sells and services bearings, couplings, gearing, drive components, and conveyer systems under brands including Browning, Jaure, Kop-Flex, McGill, Morse, Rollway, Sealmaster and System Plast.
With annual revenues of about $600 million, PTS has over 3,000 employees around the world. PTS will become part of Regal's newly-defined Power Transmission segment.
Regal management estimates 2015 accretion between $0.40 and $0.60 per share including purchase accounting adjustments and closing costs, and 2016 accretion between $0.95 and $1.15 per share. Transaction synergies are estimated to be $30 million within a four-year period.
The transaction, which is subject to customary closing conditions, is expected to close in the first quarter of 2015. Shareholder approvals are not required to complete the transaction.
Robert W. Baird & Co. served as the exclusive financial advisor to Regal. White & Case LLP served as the legal advisor to Regal.