In late September, WEG, the world’s second largest low-voltage AC motor manufacturer, announced that it would acquire the industrial motor and generator business of Regal Rexnord for US$400 million. The acquisition includes the majority of Rekoda’s Industrial Systems division, namely the Marathon, Cemp and Rotor brands. While Rekoda will continue to operate its commercial motor business, the move means the company has withdrawn from the low-voltage motor market.
On the contrary, WEG, which has rapidly expanded its share in the low-voltage motor market in recent years, will add hundreds of millions of dollars in revenue to its motor business through one of the largest acquisitions in the market in a decade.
In terms of generators, the transaction will expand WEG’s global business. For example, WEG will acquire traditional brands with good reputations in the market (such as Marathon Motors), thereby better helping WEG consolidate its position in North America; WEG It will gain access to important original equipment manufacturers (OEMs) in the generator field and have the opportunity to enter emerging markets such as China and Southeast Asia.
The company said: “The global layout of these businesses complements WEG Group’s existing businesses. By integrating new businesses and existing businesses, WEG will achieve greater economies of scale and lower costs.”
Louis Pinkham, CEO of Rekoda Group, said: “Following a comprehensive strategic review, we believe that the transaction with WEG will deliver a win-win situation for the key stakeholders of both companies. The sale of our industrial motors and generators business is consistent with our strategy, which is to focus our product portfolio on products, subsystems, end markets and applications where we can achieve GDP growth rates and gross profit margins of over 35%.
While we have made significant progress in improving the growth prospects and margins of our Industrial Systems business, we believe WEG is better positioned to support its future performance.
“Consistent with our previously stated capital deployment intentions, all available cash from this transaction will be used to reduce our debt. Combined with the strong organic cash flow expected to be generated by Rekoda, we will be on track to increase our net leverage by 2025 down to less than 2.5 times.”
Finally, Louis concluded: “I would also like to thank the employees of Industrial Systems for their many contributions to Rekoda over the years. I am confident that the transaction with WEG will create new opportunities for our outstanding employees in the motors and generators business area.” Development opportunities.”
WEG Group is the world’s leading professional motor, automation and energy equipment manufacturing company, headquartered in Brazil. Relying on German investment and technology, it has 15 manufacturing plants around the world with more than 17,000 employees. Its products are sold to 135 countries on five continents, with annual sales The amount exceeds R$299 net sales (2022) (approximately RMB 40 billion). WEG is the only manufacturer in the world that provides complete industrial electric drive solutions for low-voltage controllers and switchgear, generators, transformers, a full range of motors, and frequency converters.
WEG motors are very well-known in the medium and high voltage fields and project engineering fields, and their world-leading non-standard motor manufacturing capabilities are well-known at home and abroad.
Post time:
Oct-30-2023
