ABB has announced that it has signed a definitive agreement to divest its Mechanical Power Transmission division (Dodge) to RBC Bearings Incorporated, for $2.9 billion in cash. According to a statement, the transaction will create a manufacturer of highly engineered, performance-critical bearings and motion control components. The transaction is expected to be completed by the end of the year 2021, subject to customary closing conditions, including regulatory review.
Dodge has roughly 1,500 employees worldwide and achieved revenues of approximately $600 million for the last twelve months ending June 30, 2021, of which more than 90 percent were generated in the Americas. The operating EBITA margin was approximately 23 percent. It produces at six manufacturing sites – 5 in the U.S. and 1 in China – and its headquarter is located in Greenville, South Carolina. The president of the division is Roger Costa.
“We are delighted that Dodge has found an excellent new home with RBC Bearings, where it can continue its exciting growth story,” said ABB CEO Björn Rosengren. “This transaction further strengthens ABB’s balance sheet. In line with our capital allocation priorities, we plan to first use the proceeds from the transaction to fund organic growth, pay a rising sustainable dividend per share and make value-creating acquisitions. Furthermore, we will give an update on our plans for the Turbocharging exit and possible listing of our E-Mobility division in due course.”
“Today, we are very pleased to announce the execution of an agreement between ABB and RBC Bearings to acquire Dodge. The combination will enhance RBC Bearings’ capabilities, footprint, and customer access while increasing our exposure to Dodge’s attractive end markets. Our businesses are highly complementary, with Dodge bringing new offerings, new end markets, and more scale to the combined organization. The combined company will have an attractive position in the Aerospace, Defense and Industrial markets with a diversified client base and expansive geographic footprint,” said RBC Bearings Chairman, President and Chief Executive Officer, Dr. Michael J. Hartnett. “We look forward to welcoming Dodge’s talented team to RBC Bearings.”
J.P. Morgan is acting as exclusive financial adviser and Kirkland & Ellis LLP is serving as legal counsel to ABB on the transaction.
Arya has been a part of the Content & Research Team at Hrnxt.com. She is a keen observer of economic developments, emerging businesses, people in business and keeps a tab on latest happenings in the business environment.