Regal Rexnord Corporation · NYSE:RRX
Regal Rexnord — Regal Beloit — Merger or Acquisition (December 2010)
17 slides from Regal Rexnord's merger presentation, Dec 13, 2010
Slide 1: A Strategically Important Acquisition
John M. Perino Vice President Investor Relations December 13, 201 0 Charles A. Hinrichs Vice President Chief Financial Officer Mark J. Gliebe President Chief Operating Officer Henry Knueppel Chairman Chief Executive Officer Regal Beloit’s acquisition of A.O. Smith’s Electrical Products Company A Str
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our management’s judgment regarding future events. In many cases, you can identify forward-looking statements by term
Slide 3: Agenda
Agenda Transaction overview Overview of A.O. Smith Electrical Products Company Transaction rationale and analysis Questions
Slide 4: Overview of Regal Beloit's acquisition of EPC
Overview of Regal Beloit’s acquisition of EPC Acquiror Target Consideration Projected Synergies and Tax Benefit Projected Earnings Impact Regal Beloit Corporation Electrical Products Company (“EPC”) of A.O. Smith Corporation $875 million – $700 million of cash – $175 million of RBC stock – 2,834,026
Slide 5: Acquisition in line with strategic objectives
Acquisition in line with strategic objectives The Acquisition Of EPC Consistent With Regal Beloit’s Strategy Objective Increase revenues by 15% annually Objective Improve profitability Objective Improve customer experience Materially increases RBC top line Additional channels to drive energy efficie
Slide 6: EPC Key facts and figures
EPC Key facts and figures General Industries Pump HVAC&R Hermetic Distribution 8% 16% 21% 31% 24% Revenue distribution (based on 2010E): 7,800 employees as of 9/30/10 $688 million of revenue for LTM 9/30/10 Headquarters: Tipp City, Ohio Manufacturing footprint: Global in low-cost regions
Slide 7: EPC's Low Cost Manufacturing Footprint
EPC’s Low Cost Manufacturing Footprint United States Headquarters, 2 Manufacturing Facilities, 2 Distribution Facilities . 751 Employees Gainsborough, United Kingdom Manufacturing Facility 91 Employees China 3 Manufacturing Facilities, 1 Procurement Office 2,317 Employees Dubai, UAE Sales Office 3 E
Slide 8: EPC's Track Record of New Products
EPC’s Track Record of New Products New Products That Meet Customer Needs and Fuel Growth 2010 Commercial Oil Fryer Commercial Rolled Steel Residential Pool Commercial Gate Operator Motor Commercial Garage Operator Motor Residential Commercial A/C Compressor 2009 2008 Residential A/C Compressor Res.
Slide 9: EPC: A Leader in Hermetic motors
EPC: A Leader in Hermetic motors Segment Commentary Key Applications Select Products Leading independent supplier of hermetic motors Strong relationships with leading customers in the industry Supplier to a number of key OEM residential and commercial HVAC&R industry participants Strong global platf
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Slide 11: Combination creates compelling value
Combination creates compelling value Strong Cultural Fit And Similar Manufacturing Footprint Facilitates Integration Increases scale Complementary product offerings Creates shareholder value Builds upon strong product offering Augments presence in low cost manufacturing locations Talented management
Slide 12: $30 million to $40 million of synergies
$30 million to $40 million of synergies Anticipated Gross Synergies Anticipated Integration costs Explanation of synergies Regal Beloit Projects Meaningful Synergies Resulting From The Acquisition Of EPC Explanation of integration costs $35.0 $35.0 $30.0 $20.0 $10.0 YR 1 YR 2 YR 3 YR 4 YR 5 Procurem
Slide 13: Financial impact of combination
Financial impact of combination Combined Company Will Have Ability To Rapidly De-lever Pro Forma LTM 9/30/10 Financial Data RBC + EPC = PF RBC ($ in millions) Sales $2,146 $688 $2,833 Adj. EBITDA $326 $98 $424 % Margin 15.2% 14.2% 15.0% Capex $38 $14 $52 % of Sales 1.8% 2.1% 1.8% Free cash flow $288
Slide 14: Regal Beloit and EPC: A Strong Combination
Regal Beloit and EPC: A Strong Combination Nearly $3 billion of combined revenue and over $400 million of EBITDA in 2010E Broader reach with complementary product offerings Combined technology offers additional value to customers Additional channels to drive energy efficient technology Global, low-c
Slide 15: PREGA
i= 4 PREGA BELOIT
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Slide 17: Adjusted EBITDA reconciliation – RBC
Adjusted EBITDA reconciliation – RBC Regal Beloit Corporation LTM September 30, 2010 Income from Operations $253.0 D&A 72.9 Adjusted EBITDA $325.9 Source: Public filings. ($ in millions)