BELOIT, Wis., April 25 /PRNewswire-FirstCall/ -- Regal Beloit Corporation today announced that the Company has acquired Joyce Court Holdings Ltd. and Grand Delight Investments Ltd., sole shareholders of Wuxi Hwada Motor Co. and Wuxi New Hwada Motor Co. (collectively Hwada) located in Wuxi, China.
Hwada is a leading designer and manufacturer of Integral IEC and NEMA electric motors, which are used in various industrial applications such as compressor, pump, paper and steel processing, and power plants. The product line includes motors up to 5000 kw (6700 hp). Approximately 50% of Hwada's product sales are in the China industrial markets. The other 50% is exported to Europe (35%), the United States (10%) and Southeast Asia (5%). The business will be reported as part of the Company's Electrical Segment.
The business is expected to add approximately $75.0 to $80.0 million to sales and add $.04 to $.06 to diluted earnings per share in 2008. The Company's guidance includes the estimated impact of purchase accounting and intangible amortization based on the preliminary purchase price allocation. The purchase price was $27.6 in cash and the assumption of approximately $8.0 million in net liabilities. Additionally, under the terms of the transaction, the Company will pay to the seller up to $8.5 million received by the Company in the future upon the sale of certain real property rights owned by Hwada.
According to Henry W. Knueppel, Chairman and CEO of Regal Beloit, "We are very excited to announce the acquisition of Hwada. This is another significant, strategic-focused expansion of our industrial business in high growth markets. The acquisition represents our first wholly owned industrial motor facility in China. Hwada is currently one of the top industrial motor companies in China. It enjoys a reputation of product excellence and rapid growth and comes with an excellent management team."
The Company will further discuss this acquisition at the upcoming First Quarter Earnings conference call scheduled for May 1, 2008. For details on the conference call, please refer to the conference call press release which can be found on the Company's website.
About REGAL BELOIT CORPORATION:
Regal Beloit Corporation is a leading manufacturer and marketer of branded mechanical and electrical motion control and power generation products serving markets throughout the world. Regal Beloit is headquartered in Beloit, Wisconsin, and has manufacturing, sales, and service facilities throughout the United States, Canada, Mexico, Europe and Asia.
CAUTIONARY STATEMENT
The following is a cautionary statement made under the Private Securities Litigation Reform Act of 1995: With the exception of historical facts, the statements contained in this press release may be forward looking statements. Forward-looking statements represent our management's judgment regarding future events. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors, including: unexpected issues and costs arising from the closing of the transaction and the integration of acquired companies and businesses and marketplace acceptance of these and other recent acquisitions, including the loss of, or a decline in business from, any significant customers of Regal Beloit or the acquired businesses. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary statements. The forward-looking statements included in this press release are made only as of the date of this release, and we undertake no obligation to update these statements to reflect subsequent events or circumstances.
