Electric motors manufacturer Regal Rexnord Corporation announced Oct. 27 it has reached an agreement to acquire Altra Industrial Motion Corp., a Massachusetts-based manufacturer of automation equipment and power transmission components. Regal Rexnord will acquire 100% of Altra for $62 per share in an all-cash transaction, which is expected to close in the first half of 2023, according to a news release.
The transaction values Altra at $4.95 billion, which represents 13.6 times Altra’s last 12 months adjusted EBITDA, or 9.5 times after factoring estimated run-rate cost synergies, according to the release.
“This acquisition opens up many new avenues for profitable growth,” Regal Rexnord CEO Louis Pinkham said. “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. The transaction also significantly enhances our power transmission portfolio, in particular our industrial powertrain offering, by adding complementary products in brakes, gears, and clutches, while extending the number of end markets in which we actively participate.”
Beloit, Wisconsin-based Regal Rexnord was formed in October 2021 by the $3.69 billion merger between Regal Beloit and Rexnord Process and Motion Control. Regal Rexnord then acquired Arrowhead Systems, which has become an integral part of Regal Rexnord’s automation portfolio, in November 2021.