Emerson (NYSE: EMR) announced that it has agreed to sell its Power Transmission Solutions business unit to Regal Beloit Corporation (NYSE: RBC). The transaction is valued at $1.44 billion, representing cash proceeds of $1.4 billion plus assumption of certain postretirement liabilities, and is expected to close in the first calendar quarter of 2015, subject to regulatory approvals. Proceeds will be used for incremental share repurchase in fiscal 2015, added a company press release.
“While the Power Transmission Solutions business no longer aligns with the strategic direction of our portfolio, it is a strong business with an outstanding management team that has created significant value while part of Emerson,” commented Emerson's chairman and chief executive officer David N. Farr. “This transaction allows us to better focus on our value creation priorities and provides Regal Beloit with a unique opportunity to strengthen and grow its mechanical power transmission segment."
Currently a part of Emerson’s Industrial Automation segment, the Power Transmission Solutions business unit had 2014 revenue of more than $600 million, is based in Florence, Kentucky, and employs over 3,000 people globally. The business designs and manufactures couplings, bearings, conveying components, gearing, drive components, and supporting services and solutions, with brands including Browning, Jaure, Kop-Flex, McGill, Morse, Rollway, Sealmaster, and System Plast.
"I am grateful to the employees of Power Transmission Solutions for their commitment to growth and operational excellence throughout our long partnership," concluded Emerson's Farr. "We will work closely with Regal Beloit to ensure a smooth transition for customers and employees."