Regal Rexnord Plans To Sell Industrial Motors & Generators Businesses For $400M

Regal Rexnord Corp RRX disclosed that it has entered into a definitive agreement to sell the Industrial Motors and Generators businesses for $400 million.

The asset sale comprises most of its Industrial Systems segment to WEG through certain subsidiaries of WEG SA WEGZY.

The transaction is expected to close in H1 2024, subject to obtaining required regulatory approvals and meeting customary closing conditions.

"After a thorough strategic review, we believe this transaction with WEG will be a true win-win for both companies' principal stakeholders. The sale of our Industrial Motors and Generators businesses is consistent with our strategy of focusing the portfolio on products, sub-systems, end markets and/or applications where we can achieve GDP-plus growth rates and gross margins above 35%. While we have made significant progress improving the growth prospects and margins at these businesses, we believe that WEG is in a better position to accelerate their performance going forward," stated Louis Pinkham, CEO.

As of June 30, 2023, cash and cash equivalents stood at $659.6 million. 

Also Read: Regal Rexnord's FY23 Analyst Forecast: Anticipated Revenue Jump And Long-Term Profit Improvements Despite Short-Term HVAC Challenges

Price Action: RRX shares closed lower by 0.63% at $146.45 on Friday.