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
Be the first to comment