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14 April, 2024

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Regal Rexnord buys Altra Industrial Motion for $4.95bn

03 April, 2023

Regal Rexnord has bought Altra Industrial Motion, closing a deal that was signed in October 2022 and values Altra at $4.95bn. Regal Rexnord says that the merger will transform it into a global automation supplier with more than 70% of its sales in expanding markets, as well as combining the companies’ “complementary” power transmission portfolios. It is aiming for revenues of around $8.3bn by 2025 and expects costs synergies worth $160m within four years.

The deal brings together brands including Kollmorgen, Portescap, Twiflex, Thomson, Bauer Gear Motor, Stieber, Stromag, Jaure, Kop-Flex, Centa, Falk and Rexnord.

Regal Rexnord CEO Louis Pinkham says he is “incredibly excited about all that we expect to accomplish as one, enhanced Regal Rexnord team. Together, we have clear lines of sight to faster growth, higher margins, stronger free cash flow and improved ROIC.

“Altra's Automation & Specialty platform transforms our existing automation portfolio into a meaningful, global automation solutions provider,” he adds. “Altra's Power Transmission Technologies business significantly enhances our legacy power transmission portfolio, in particular our industrial powertrain offering, by adding complementary products in brakes, gears, and clutches.

“The combined power transmission, automation and powertrain capabilities of the new Regal Rexnord offer customers a significantly enhanced value proposition across a wider range of end-markets – many with highly attractive secular growth tailwinds,” says Pinkham.

The deal rebalances Regal Rexnord’s portfolio between motion control (which will now account for 48% of its sales), climate solutions (15%), commercial systems (15%), automation and speciality (13%) and industrial systems (9%).

Regal Rexnord says that the merger will allow it to offer “more robust” sub-systems, including industrial powertrains, to a wider range of markets. It will be in “a unique position” to provide customers with a wider and more value-added range of services, including up-front design, performance optimisation, and diagnostic support.

Regal Rexnord is will also be better positioned for Industry 4.0, and its offering will include a suite of IIoT and data analytics capabilities, marketed under the Perceptiv brand, using data from its power transmission, automation and motor components.

Following the merger, Regal Rexnord will have four divisions:

• Industrial Powertrain Solutions (IPS), accounting for about 37% of 2022 sales, will consist of most of the previous Motion Control Solutions (MCS) business, excluding the conveying and aerospace business units, plus Altra's Power Transmission Technologies segment.

Power Efficiency Solutions (PES), representing about 31% of sales, and consisting of the former Climate Solutions and Commercial Systems businesses.

Regal Rexnord CEO Louis Pinkham: incredibly excited

Automation & Motion Control (AMC) accounting for about 24% of sales and consisting of the current MCS aerospace and conveying businesses, Altra's Automation & Specialty (A&S) segment, and the Regal Rexnord Thomson business that is currently part of the Industrial Systems segment.

Industrial Systems representing around 8% of revenues and consisting of its current operations, excluding the Thomson business.

Regal Rexnord was created in 2021 when the electric motors and mechanical power transmission manufacturer Regal Beloit merged with Rexnord Process and Motion Control. The combined business, employing around 29,000 people with manufacturing facilities on five continents, generated revenues of around $5bn in 2022, with an Ebitda of more than $1bn. Its headquarters are in Wisconsin.

Regal Rexnord’s brands include Browning, Grove Gear, Hub City, Jaure, Kop-Flex, McGill, ModSort, Sealmaster, System Plast, Berg, Cambridge, Centa, Falk, Rexnord and Stearns.

Before the merger, Altra Industrial Motion had annual sales of $1.9bn, a workforce of more than 9,0000, and 47 production facilities in 17 countries. Its brands include Bauer Gear Motor, Boston Gear, Kollmorgen, Portescap, Stieber, Stromag, Svendborg Brakes, TB Wood’s, Twiflex, Thomson and Warner Electric.

Regal Rexnord:  Twitter  LinkedIn  Facebook




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