Milwaukee-based manufacturer
Regal Rexnord Corp. announced today that it has entered into a definitive agreement to sell its Industrial Motors and Generators businesses to Brazil-based
WEG, a producer of electric motors, generators, transformers, drives and coatings, for $400 million.
The transaction is expected to be completed during the first half of 2024.
The Industrial Motors and Generators businesses comprise the majority of Regal Rexnord’s Industrial Systems segment.
Regal Rexnord is a manufacturer 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. The company is comprised of four operating segments: Automation & Motion Control, Industrial Powertrain Solutions, Power Efficiency Solutions and Industrial Systems.
"After a thorough strategic review, we believe this transaction with WEG will be a true win-win for both companies' principal stakeholders,” said Regal Rexnord chief executive officer
Louis Pinkham. “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 35%. While we have made significant progress improving the growth prospects and margins at these businesses, we believe that WEG is in a better position to accelerate their performance going forward.”
Regal Rexnord plans to use all available net proceeds from the transaction to reduce its debt, Pinkham said.
To assist with the deal, Guggenheim Securities, LLC is serving as financial advisor to Regal Rexnord, and Godfrey & Kahn, S.C. is serving as legal counsel.
