Carlyle Files IPO for Rexnord

The Carlyle Group has filed with the U.S. Securities and Exchange Commission for an initial public offering (IPO) to make Rexnord a publicly-traded company with its stock listed on the NYSE. In the process, Rexnord is actually owned by RBS Acquisition Corp., a part of Carlyle Group. Rexnord will trade under a holding company, RBS Global Inc., under the symbol RXN. Carlyle, one of the world's largest private investment firms, acquired Rexnord in late 2002 from Invensys plc. Carlyle owns 95% of Rexnord, via a leveraged buyout in which it invested $360 million. Carlyle announced earlier this year it was evaluating options for Rexnord, from divestiture to monetization. Rexnord, headquartered in Milwaukee, Wisconsin, is a multi-tier industrial company with several thousand employees. Rexnord manufactures power transmission components, motor brakes, chain, and bearings. There are five bearing companies in Rexnord. Since its acquisition by Carlyle, Rexnord has been streamlined, much-needed investments made in plant and equipment, duplicate and overlapping operations merged, strategic acquisitions made to round-out product lines, and more stress placed on marketing to organic growth opportunities. Rexnord Bearing Group Link-Belt Bearing Division, headquartered in Indianapolis, Indiana, manufactures a wide range of automotive and industrial bearings, inserts and mounted units. A second manufacturing location in Clinton, Tennessee produces cylindrical roller bearings. Link-Belt is best known for its industrial bearing inserts and mounted units, including pillow blocks, flange units, plummer blocks and all-stainless units. Link-Belt offers not only ball bearings and cylindrical roller bearings, but also sleeve bearings in babbitt, bronze and cast iron. Rex Bearings, in Downers Grove, Illinois, manufactures industrial mounted roller bearings, pillow blocks, flange blocks and take-up units which allow for a wide degree of shaft misalignment within the bearing itself. Filament Bearing Operation, also in Downers Grove, Illinois, manufactures Duralon plain inserts of Teflon and carbon fiber. MB Bearings / MB Manufacturing is located in Indianapolis, Indiana with an affiliated division, Bearing Technologies, in Benton Harbor, Michigan. Acquired by Rexnord in 1998, MB manufactures standard and custom precision mounted bearings and inserts -- pillow blocks, flange units, take-up units, flange brackets and hanger units. MB bearings are now under the Link-Belt umbrella. W.M. Berg, Inc. is located in Rockaway, New York. Berg specializes in manufacturing and distributing miniature precision mechanical components. The Berg miniature bearing line includes ball, roller, needle, nonmetallic, sintered, spherical, thrust and oilless. Sizes range from 3/64" to 1/2". Underwritten by Merrill Lynch & Co. and Credit Suisse First Boston, Carlyle said it expects the IPO to net in the vicinity of $400 million, although the final numbers have not yet been determined. Rexnord had been a publicly traded company until it was acquired by Invensys in 1994. Proceeds from the IPO will be used to pay down Rexnord's $773 million debt load. Rexnord sales over the first nine months of fiscal 2006 reached $777.7 million, up more than 30% over last year, propelled by its strong presence in the aircraft and aerospace markets.