Regal Rexnord Corporation Announces Definitive Agreement To Sell Its Industrial Motors & Generators Businesses To WEG
- Sale of businesses aligns with Regal Rexnord's strategy of focusing on high-growth products and markets
- Proceeds will be used to reduce debt, aiming to lower net leverage ratio to below 2.5x by 2025
- None.
Regal Rexnord CEO, Louis Pinkham, commented on the agreement: "After a thorough strategic review, we believe this transaction with WEG will be a true win-win for both companies' principal stakeholders. The sale of our Industrial Motors and Generators businesses is consistent with our strategy of focusing the portfolio on products, sub-systems, end markets and/or applications where we can achieve GDP-plus growth rates and gross margins above
Pinkham continued, "Consistent with our previously stated capital deployment intentions, all available net proceeds from the transaction will be used to reduce our debt. In combination with Regal Rexnord's strong expected organic cash flow generation, we remain on track to reduce our net leverage ratio to below 2.5x by 2025."
Pinkham concluded, "I would also like to thank our associates at Industrial Systems for their many contributions to Regal Rexnord over the years. I believe the transaction with WEG will create new opportunities for our talented associates in the Motors & Generators businesses."
Advisors
Guggenheim Securities, LLC is serving as financial advisor to Regal Rexnord, and Godfrey & Kahn, S.C. is serving as legal counsel.
About Regal Rexnord
Regal Rexnord Corporation is a global leader in the engineering and manufacturing of factory automation sub-systems, industrial powertrain solutions, automation and mechanical power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems. Through longstanding technology leadership and an intentional focus on producing more socially conscious and environmentally-friendly products and sub-systems, the Company is regularly addressing increasingly relevant secular demands of customers in the medical, alternative energy, aerospace, food & beverage, general industrial and warehouse/intralogistics end markets, among others. In short, Regal Rexnord's 36,000 associates around the world are proud to be working each day towards fulfilling the Company's purpose – helping create a better tomorrow – for its customers and for the planet.
Regal Rexnord is comprised of four operating segments: Automation & Motion Control, Industrial Powertrain Solutions, Power Efficiency Solutions and Industrial Systems. Regal Rexnord is headquartered in
Forward Looking Statements
This release contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which reflect Regal Rexnord's current estimates, expectations and projections about Regal Rexnord's future results, performance, prospects and opportunities. Such forward-looking statements may include, among other things, statements about the proposed sale of the Industrial Motors and Generators businesses, Regal Rexnord's ability to realize the benefits anticipated from the sale of the Industrial Motors and Generators businesses and other expectations and estimates for future periods, including as a result of delay or failure to obtain certain required regulatory approvals or the failure of any other condition to the closing of the transaction. Forward-looking statements include statements that are not historical facts and can be identified by forward-looking words such as "anticipate," "believe," "confident," "estimate," "expect," "intend," "plan," "target," "may," "will," "project," "forecast," "would," "could," "should," and similar expressions. These forward-looking statements are based upon information currently available to Regal Rexnord and are subject to a number of risks, uncertainties, and other factors that could cause actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Important factors that could cause Regal Rexnord's, actual results to differ materially from the results referred to in the forward-looking statements Regal Rexnord makes in this release include: the possibility that the conditions to the consummation of the proposed sale of the Industrial Motors and Generators businesses (the "Proposed Sale") will not be satisfied on the terms or timeline expected, or at all; failure to obtain, or delays in obtaining, or adverse conditions related to obtaining regulatory approvals sought in connection with the Proposed Sale; the possibility that the pendency of the Proposed Sale could materially and adversely affect Regal Rexnord's business, financial condition, results of operation or cash flows Regal Rexnord's substantial indebtedness as a result of the acquisition of Altra Industrial Motion Corp. (the "Altra Transaction") and the effects of such indebtedness on Regal Rexnord's financial flexibility after the Altra Transaction; Regal Rexnord's ability to achieve its objectives on reducing its indebtedness on the desired timeline; dependence on key suppliers and the potential effects of supply disruptions; fluctuations in commodity prices and raw material costs; any unforeseen changes to or the effects on liabilities, future capital expenditures, revenue, expenses, synergies, indebtedness, financial condition, losses and future prospects; the possibility that Regal Rexnord may be unable to achieve expected benefits, synergies and operating efficiencies in connection with the acquisition of Altra and the merger with Rexnord Process & Motion Control business (the "Rexnord PMC business") within the expected time-frames or at all and to successfully integrate Altra and the Rexnord PMC business; Regal Rexnord's ability to identify and execute on future M&A opportunities, including significant M&A transactions; the impact of any such M&A transactions on Regal Rexnord's results, operations and financial condition, including the impact from costs to execute and finance any such transactions; expected or targeted future financial and operating performance and results; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) being greater than expected following the Altra Transaction or the merger with the Rexnord PMC business; Regal Rexnord's ability to retain key executives and employees; the possibility that the information currently available to Regal Rexnord in estimating the benefits of the Proposed Sale discussed in this release may not accurately reflect the results of Regal Rexnord's business for such future periods; the continued financial and operational impacts of and uncertainties relating to the COVID-19 pandemic on customers and suppliers and the geographies in which they operate; uncertainties regarding the ability to execute restructuring plans within expected costs and timing; challenges to the tax treatment that was elected with respect to the merger with Rexnord PMC business and related transactions; requirements to abide by potentially significant restrictions with respect to the tax treatment of the merger with the Rexnord PMC business which could limit Regal Rexnord's ability to undertake certain corporate actions that otherwise could be advantageous; actions taken by competitors and their ability to effectively compete in the increasingly competitive global electric motor, drives and controls, power generation and power transmission industries; the ability to develop new products based on technological innovation, such as the Internet of Things, and marketplace acceptance of new and existing products, including products related to technology not yet adopted or utilized in geographic locations in which Regal Rexnord does business; dependence on significant customers; seasonal impact on sales of products into HVAC systems and other residential applications; risks associated with climate change and uncertainty regarding our ability to deliver on our climate commitments and/or to meet related investor, customer and other third party expectations relating to our sustainability efforts; risks associated with global manufacturing, including those associated with public health crises and political, societal or economic instability, including instability caused by the conflict between
View original content:https://www.prnewswire.com/news-releases/regal-rexnord-corporation-announces-definitive-agreement-to-sell-its-industrial-motors--generators-businesses-to-weg-301937009.html
SOURCE Regal Rexnord Corporation