MATTHEW BYATT
Managing Partner
Regal and Rexnord combine to create power transmission giant
Two Wisconsin-based industrial parts makers, Regal Beloit and Rexnord, are merging their power transmission businesses with a view to accelerating R&D and digital service capabilities, developing world-class IIoT solutions and extracting cost synergies to drive long-term value creation.
The transaction values Rexnord’s process & motion control business at $3.7bn or 14.2x adjusted EBITDA.
While Rexnord makes heavy duty mechanical components like couplings and bearings for customers in the automotive, mining and energy sectors, Regal Beloit services lighter use cases, including industrial power transmission and power generation components including electric motors.
This combination of complementary portfolios will create a power transmission giant with a product portfolio spanning the entire drive train. Not only will this accelerate R&D and open new avenues for growth, but as Acuity Managin Partner Matthew Byatt points out, the deal will unlock opportunities to employ the latest analytics tools for decision-making.
When the transaction closes in the fourth quarter of 2021, the combined business will be led by its existing board with two new directors from Rexnord.
Meanwhile, Rexnord will refocus as a pure-play Water Management business, with the goal of leveraging its portfolio of IoT-connected products to becoming the leading provider of smart water solutions.
“This deal highlights that technology is at the core of even the most industrial of M&A transactions. As well as the usual merger benefits, Regal makes it clear that providing full digital coverage of the customer lifecycle, using augmented reality to provide real-time insights and leveraging predictive analytics to provide prognostic action are key deal drivers.”
Matthew Byatt | Managing Partner
Matthew is a Co-Founder and Managing Partner at Acuity and leads the Acuity Advisors’ Deeptech practice.
Matthew has held senior leadership and corporate finance positions with some of the UK’s most successful and influential technology and consultancy companies. Roles with ARM, McKinsey and Cadence have given Matthew an exceptional insight into the world’s most successful businesses and a number of the UK’s eminent start-ups, underpinning his success at Acuity.
Matthew has considerable experience across a broad range of technology sectors throughout the UK, US and Asia, ranging from nanotechnology, semiconductor and cleantech to digital media and internet businesses. It’s experience that has given him a robust, well-developed and international network. Having also run and successfully exited his own business, Matthew has a deep understanding of the financial and emotional aspects of this demanding process, bringing a unique and authoritative perspective to each business sale.
One of Matthew’s strengths is understanding complex technical value propositions, one of the benefits of training as an electronic engineer. He gets to the heart of what drives a company’s value and communicates this persuasively to potential buyers and investors. Matthew understands a buyer’s motivation intuitively and delivers a compelling rationale for why a business sale should be of strategic interest. His insight consistently yields higher deal values and results in great successes for his clients.