ANDY LISTER
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 Partner Andy Lister 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.”
Andy Lister | Partner
Andy has spent the last ten years advising entrepreneurs, shareholders and boards on business sales, acquisitions, equity fund raisings, valuations and strategic reviews. Andy has worked with clients in a number of technology-enabled sectors, including smart infrastructure, the internet of things, M2M communications and clean technology, and has also worked with a number of high growth manufacturing and industrial distribution businesses.
Andy has a particular interest in cross border M&A, has completed deals with North American, European, African and Asian counterparties, and brings practical emerging markets experience having worked as an M&A advisor in India from 2008 – 2010.
Andy is a prize-winning chartered accountant, qualifying in 2004 with KPMG in Leeds, before joining KPMG’s Corporate Finance team in London in 2005. Andy was a Director at KPMG before joining Acuity in July 2015.