ABB Australia is a part of ABB, a world-leading power and automation technology group.
ABB is acquiring Baldor Electric Company to enhance its automation portfolio and position itself as a market leader in industrial motion solutions.
Baldor Electric Company is a North American company specialising in industrial motors.
The all-cash transaction is valued at approximately $4.2 billion, including $1.1 billion of net debt. The deal is expected to close in the first quarter of 2011.
The acquisition closes a gap in ABB’s automation portfolio in North America with the addition of Baldor’s strong NEMA motors product line, positioning the company as a market leader for industrial motors including high-efficiency motors.
Baldor also adds a growing and profitable mechanical power transmission business to ABB’s portfolio.
The transaction will also substantially improve ABB’s access to the industrial customer base in North America, opening opportunities for ABB’s wider portfolio including energy-efficient drives and complementary motors.
The acquisition will also help ABB meet an accelerated demand caused by regulatory changes in various part of the world including the US for energy-efficient industrial motion products.
The acquisition strengthens ABB’s position as a leading supplier of industrial motion solutions, also enabling the company to tap the huge potential in North America for rail and wind investments, both of which are expected to grow rapidly in the coming years.
Joe Hogan, ABB CEO says that Baldor’s product range and regional scope are highly complementary to ABB’s, giving both companies significant opportunities to deliver greater value to their customers.
John McFarland, Chairman of the Board and CEO of Baldor who will stay with the combined business to support a successful integration, says that the transaction is in the best interest of their shareholders, employees and customers.
He adds that the acquisition demonstrates the value their employees have created as well as the strength of their brand and products in the global motors industry.
Ron Tucker, Baldor’s current President and COO, and CEO designate will run Baldor including the mechanical power transmission products business as well as ABB’s motor and generator business in North America after the transaction is completed.
Based in Fort Smith, Arkansas, Baldor is a leading supplier to the North American industrial motors industry. Their range of mechanical power transmission products includes mounted bearings, enclosed gearing and couplings as well as drives and generators.
Baldor’s business will be integrated into ABB’s Discrete Automation and Motion division alongside the existing Motors and Generators business.
Ulrich Spiesshofer, Executive Committee member responsible for ABB’s Discrete Automation and Motion division says they expect to achieve over $200 million in annual synergies by 2015, consisting of more than $100 million annual cost synergies and at least the same global revenue synergies.
Additionally, ABB will build on Baldor’s excellent North American position to sell energy-efficient drives, larger motors and generators. The long-term plan is to accelerate the expansion of Baldor’s mechanical power transmission product portfolio into the global process automation market using ABB’s strong channels in the sector.
Citi served as financial advisor to ABB while UBS Investment Bank served as financial advisor to Baldor.