ZURICH, Switzerland, and FORT SMITH, Ark. - ABB, a leading power and automation technology company, has agreed to acquire Baldor Electric Co., a North American leader in industrial motors, in an all-cash transaction valued at approximately $4.2 billion, including $1.1 billion of net debt.
Under the terms of the definitive agreement, which has been unanimously approved by both companies’ boards of directors, 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 percent premium to Baldor’s closing stock price on Nov. 29, 2010. The board of directors of Baldor will recommend that Baldor shareholders tender their shares in the tender offer. The deal is expected to close in the first quarter of 2011.
According to ABB, the transaction closes a gap in its automation portfolio in North America by adding Baldor’s NEMA motors product line, and it 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 is expected to 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. The company said this move comes at a time when regulatory changes in the U.S. and other parts of the world will accelerate demand for energy efficient industrial motion products.
“Baldor is a great company with an extremely strong brand in the world’s largest industrial market,” said Joe Hogan, ABB’s CEO. “Baldor’s product range and regional scope are highly complementary to ours and give both companies significant opportunities to deliver greater value to our customers.”
John McFarland, chairman of the board and CEO of Baldor, commented, “Our board of directors believes this transaction is in the best interest of our shareholders, our employees and our customers. It demonstrates the value our employees have created and the strength of our brand and products in the global motors industry. We are excited about the opportunity to join ABB’s worldwide family as we have always respected ABB. We are very pleased that ABB will locate its motor and generator business headquarters for North America in Fort Smith and we are confident that the combined global platform will be well positioned to capitalize on meaningful growth opportunities in the future.” McFarland will stay with the combined business to support a successful integration.
“ABB is well known in the marketplace for premium, innovative, and advanced products. We have respected them as both a market participant and a value-added supplier for many years,” said Ron Tucker, Baldor’s current president and COO, and CEO designate. Tucker will run Baldor including the mechanical power transmission products business and ABB’s motor and generator business in North America after the transaction is completed.
Baldor is based in Fort Smith, Ark., and is a leading supplier in the large North American industrial motors industry. In addition, 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 in order to achieve further penetration of this product line.
For more information, visit www.abb.com.
Publication date: 12/06/2010
Dec. 10, 2010: ABB to Acquire Baldor Electric Co.
December 10, 2010