Regal-Beloit Corporation announced that it has completed the purchase of General Electric (GE) Company's Heating, Ventilation and Air Conditioning (HVAC)/Refrigeration Motors and Capacitors operations of GE Consumer & Industrial. The HVAC/Refrigeration Motors and Capacitors operations include a full line of motors for residential HVAC applications and capacitors for HVAC and high-intensity lighting applications.
The transaction closed on Dec. 31, 2004. The purchase price was U.S. $270 million in cash and the issuance of 4.56 million shares of the Company's common stock, which based on the closing price on Dec. 31, 2004, results in total consideration of approximately $400 million. Regal-Beloit expects the acquisition to add sales of approximately $500 million in 2005 and, including an estimated $.20 per share of one-time costs and the impact of related financing activities, to add $0.32 to $0.34 to 2005 diluted earnings per share.
According to Regal-Beloit, key attributes of the acquisition include:
A leading market position for electric motors used in central heating and air-conditioning systems.
Expansion of the its customer base to include major HVAC OEMs.
Patented variable-speed motor technology.
Expansion of global manufacturing capabilities.
Use of the trade name "GE HVAC Motors by Regal-Beloit" for a period of up to 15 years.
"This is a defining acquisition," stated James L. Packard, CEO and chairman of Regal-Beloit. We believe this acquisition, coupled with the acquisition of the Commercial AC Motor business we completed in August, makes us the largest Commercial/Industrial motor producer in the United States as well as the leader in HVAC motors. Equally important, these acquisitions bring impressive technology and significant low cost manufacturing resources to our company. We are excited about the potential for these businesses and the outstanding employees that will be joining our Company. We are particularly pleased to announce that Mark Gliebe, formerly General Manager of GE Motors & Controls, will also be joining Regal-Beloit."
The HVAC/Refrigeration Motors and Capacitors operations are based in Fort Wayne, IN, U.S. Included in the sale are motor manufacturing facilities in Springfield, MO, U.S.; Reynosa, Mexico; and Faridabad, India and a capacitor manufacturing facility in Juarez, Mexico. The business also has technology resources located in Hyderabad, India.
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