Baldor to get a piece of Rockwell’s action

11/14/2006


Baldor Electric Co. has signed a definitive agreement to acquire the Reliance Electric Co. and certain of its affiliated companies from Rockwell Automation for $1.8 billion. These constitute Rockwell’s Power Systems business, which markets products under the Reliance Electric and Dodge brand names. These brands complement Baldor’s business in industrial electric motors, drives and generators, and gives Rockwell Automation stock in Baldor. Click here to read “ For sale: mechanical, motor businesses. ” Rockwell purchased Reliance in 1994 for $1.6 billion.
www.controleng.com/article/CA6358290.html

Baldor Electric Co. is a leading manufacturer of industrial electric motors, drives and generators headquartered in Fort Smith, AR, and had 2005 revenues of $721 million. Baldor has approximately 3,900 employees worldwide, 14 manufacturing facilities, and claims the highest customer preference in the industry. When completed, the transaction advances Baldor’s capabilities among North American manufacturers of industrial electric motors and power transmission products.

Baldor will purchase 100% equity interest in the Power Systems business for $1.8 billion, comprised of $1.75 billion in cash and approximately 1.6 million shares of Baldor common stock (market value of $50 million). The parties expect to complete the transaction (subject to customary closing conditions and necessary regulatory approvals) during first-quarter of 2007.
“The Reliance and Dodge businesses are a great fit with our existing businesses,” said John McFarland, chairman and chief executive officer of Baldor. “The Power Systems business will complement and add strength to Baldor’s product line.”

The transaction provides a number of benefits and opportunities for Baldor customers, Baldor shareholders, and employees of each. Specifically, it:

  • Extends the Baldor product line into power transmission products and larger motors;

  • Enables Baldor to offer customers a broader range of products and services;

  • Increases the combined manufacturing capability and flexibility;

  • Provides strong opportunities for synergies and cost savings in the combined businesses;

  • Provides a manufacturing base in China for Asian markets;

  • Adds approximately $1 billion dollars in sales with margins higher than Baldor’s existing business;

  • Broadens investor interest in Baldor.

The Power Systems segment generated approximately $1.0 billion in revenue for the 12 months ending Sept. 30, 2006. Baldor expects to realize annual pre-tax synergies of approximately $30 million within three years mainly from the benefits of combined purchasing, working capital management, reduced overhead, and increased productivity. Baldor expects the transaction to add approximately $0.10 its earnings in the first full year.

Investment banker BNP Paribas has agreed to support the transaction and expects to finance the $1.75 billion dollar cash consideration through a combination of debt and approximately $350 million of equity or equity-linked securities. Upon completion of the transaction, total debt is expected be approximately $1.5 billion. Leverage ratios are expected to decline significantly over the next three years to be in line with peer businesses as the new entity generates cash flow and synergies are realized.

C.G. Masi , Control Engineering senior editor
For more information about Baldor Electric Co. visit www.baldor.com





The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Robotic integration and cloud connections; SCADA and cybersecurity; Motor efficiency standards; Open- and closed-loop control; Augmented reality
Controller programming; Safety networks; Enclosure design; Power quality; Safety integrity levels; Increasing process efficiency
Additive manufacturing benefits; HMI and sensor tips; System integrator advice; Innovations from the industry
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This article collection contains several articles on how automation and controls are helping human-machine interface (HMI) hardware and software advance.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Robotic integration and cloud connections; SCADA and cybersecurity; Motor efficiency standards; Open- and closed-loop control; Augmented reality
Controller programming; Safety networks; Enclosure design; Power quality; Safety integrity levels; Increasing process efficiency
Additive manufacturing benefits; HMI and sensor tips; System integrator advice; Innovations from the industry
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This article collection contains several articles on how automation and controls are helping human-machine interface (HMI) hardware and software advance.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Robotic integration and cloud connections; SCADA and cybersecurity; Motor efficiency standards; Open- and closed-loop control; Augmented reality
Controller programming; Safety networks; Enclosure design; Power quality; Safety integrity levels; Increasing process efficiency
Additive manufacturing benefits; HMI and sensor tips; System integrator advice; Innovations from the industry
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This article collection contains several articles on how automation and controls are helping human-machine interface (HMI) hardware and software advance.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me