Regal Rexnord Corporation (NYSE: RRX) today announced that it has reached a definitive agreement with Altra Industrial Motion Corp. (Nasdaq: AIMC) providing for Regal Rexnord to acquire 100% of Altra shares in an all cash transaction for $62.00 per share.
The transaction values Altra at $4.95 billion2, representing 13.6x LTM Adjusted EBITDA, or 9.5x after factoring estimated run-rate cost synergies. The transaction is subject to the receipt of regulatory approvals, Altra shareholder approval, and the satisfaction of other customary closing conditions. The transaction is expected to close in the first half of 2023.
With the addition of Altra, Regal Rexnord expects 2022 pro forma revenue of ~$7.2 billion, Adjusted EBITDA of ~$1.5 billion, and an Adjusted EBITDA margin of ~21%. Based on the growth and margin outlook for the combined business, and after including $160 million in annualized run rate cost synergies, Regal Rexnord targets 2025 pro forma revenue of ~$8.3 billion, 2025 Adjusted EBITDA of ~$2.1 billion, and an Adjusted EBITDA margin >25%.
“This acquisition opens up many new avenues for profitable growth. In particular, Altra’s Automation & Specialty platform transforms our existing automation portfolio – namely ModSort and Automation Solutions (formerly Arrowhead) – into a meaningful, global automation solutions provider. The automation business has highly attractive growth prospects and margins, serving many markets that have anticipated secular growth tailwinds, including factory automation, medical, aerospace, and warehouse & logistics,” said Regal Rexnord CEO, Louis Pinkham.
Altra is a global designer and manufacturer of a wide range of highly engineered motion control, automation, and power transmission solutions. The transaction expands Regal Rexnord’s portfolio, customer reach, and product diversity while enabling the creation of shareholder value through enhanced growth and substantial cost synergies.
Rakesh Sachdev, Non-Executive Chairman, commented, “I, and the entire Board, are extremely excited to see Regal Rexnord take this next step in what has been a compelling transformation journey. We are confident, given a proven operational and M&A integration track record, the organization is well positioned to pursue what we believe will be a highly value-enhancing transaction – for Regal Rexnord’s associates, its customers, and its shareholders.”
Read the entire News Release.
About Regal Rexnord
Regal Rexnord Corporation is a global leader in the engineering and manufacturing of industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems, serving customers around the world. Through longstanding technology leadership and an intentional focus on producing more energy-efficient products and systems, Regal Rexnord helps create a better tomorrow – for its customers and for the planet.
Regal Rexnord is comprised of four operating segments: Motion Control Solutions, Climate Solutions, Commercial Systems and Industrial Systems. Regal Rexnord is headquartered in Beloit, Wisconsin and has manufacturing, sales, and service facilities worldwide. For more information, visit RegalRexnord.com.
