TECUMSEH, Mich. - Tecumseh Products Co. signed an agreement with Regal Beloit Corp. to sell to Regal Beloit the majority of Tecumseh’s Electrical Components business operations for $220 million in cash, subject to customary adjustments at closing. The operations to be sold, principally composed of the Residential & Commercial Motors and Asia Pacific divisions of Tecumseh’s Fasco business unit, accounted for about 70 percent of Electrical Components sales in 2006. Tecumseh will use the proceeds of the transaction to pay off the debt associated with Tecumseh’s second lien credit agreement, as well as a substantial portion of its outstanding first lien debt.
“This is another important step in our ongoing efforts to reduce the company’s debt, sharpen its strategic focus, and improve its financial performance,” said James Bonsall, Tecumseh’s president and COO. “Regal Beloit Corp., as a worldwide leader in electrical motion control products, will be well positioned to further develop and grow these businesses as part of its overall product portfolio.”
Completion of the transaction, which is subject to regulatory approval by the Federal Trade Commission and other customary closing conditions, is currently expected to occur in the third calendar quarter.
Publication Date: 08/13/2007