Baldor to be Acquired by ABB
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ABB, Zurich, Switzerland, will acquire Baldor Electric Co., Fort Smith, Ark., USA, in an all-cash transaction valued at approximately $4.2 billion, including $1.1 billion of net debt. According to the agreement, approved by both companies boards, ABB will commence a tender offer to purchase all of Baldor's outstanding shares for $63.50 per share in cash. The transaction represents a 41% premium to Baldor's closing stock price on November 29. The deal is expected to close in the first quarter of 2011.
The transaction closes a gap in ABB's automation portfolio in North America by adding Baldor's NEMA motors product line and positions 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 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.
In addition to large industrial motors, Baldor offers a broad range of mechanical power transmission products such as mounted bearings, enclosed gearing and couplings, used primarily in process industries, as well as drives and generators. The Baldor drives business will be combined with the larger ABB drives business. Baldor employs some 7,000 people and reported an operating profit of $184 million on revenue of $1.29 billion in the first nine months of 2010. This represents an increase of 30% in operating profit and 11% in revenue over the comparable period in 2009.
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