Baldor Acquiring Reliance Electric And Dodge Bearing From Rockwell

Baldor Electric Company (USA; NYSE: BEZ) announced it will acquire Dodge Bearing, Reliance Electric and other operations related to Rockwell Automation's Power Systems Business division. The transaction will cost Baldor $1.75 billion in cash and 1.6 million shares of Baldor common stock; the deal is projected to close in early 2007. Although it had been shopping the deal, Rockwell publicly announced in June that its Power Systems Division was officially on the block for sale. Power Systems includes Reliance Electric motor and motor repair, and Dodge mechanical components Dodge manufactures a wide variety of bearings, gears and other power transmission components. On the bearing side, it offers mounted and unmounted bearings: ball, tapered roller, spherical roller, hydrodynamic, plain sleeve and journal bearings. For mounted bearings, it offers mounted ball bearings, take-up frames, and other components. Founded in 1920, Baldor Electric is a leading manufacturer of industrial electric motors, drives and generators. For many people, Baldor was a surprise acquirer, if only because its sales are far less than the Rockwell operations is it acquiring. Baldor operates 14 manufacturing locations and employs more than 3,900 people. Baldor said the combined organization will be a leading North American manufacturer of industrial electric motors and power transmission equipment. The Rockwell businesses will add approximately $1 billion of yearly sales and contribute higher margins ($150 million in 2005) than Baldor's current product lines. Baldor recently reported record third quarter sales of $213 million and had 2005 sales of approximately $720 million. Baldor's Chairman and CEO, John McFarland, said, "The Reliance and Dodge businesses are a great fit with our existing businesses. The Power Systems business will complement and add strength to Baldor's product line. The Power Systems business, like Baldor, provides the best industrial products available in the marketplace and sells them to value-minded customers. Mr. McFarland went on to say, "Dodge products have been available for over 125 years, Reliance motors for over 100 years and Baldor motors for over 85 years. These companies have a long history of customer preference and good profitability. Baldor, Dodge and Reliance has strong reputations in the industrial marketplace. This is a unique opportunity to build a stronger company for our customers, our employees and our shareholders." Sources said that they do not expect any immediate changes in the Dodge bearing business.