Provides Complementary Products, End
Markets and Geographies
Altra Industrial Motion Corp. (NASDAQ:AIMC), a global manufacturer
and marketer of electromechanical power transmission and motion
control products, today announced that it intends to acquire the
Stromag business from GKN plc. Stromag generated
approximately 131 million euros in revenue in 2015, and the
acquisition is anticipated to be accretive to Altra’s earnings in
2017, excluding any one-time or acquisition-related costs.
The acquisition cost comprises the assumption of
debt totaling approximately 14 million euros and a cash
consideration, payable at closing, of approximately 184 million
euros and is subject to normal adjustments in working capital and
other reconciling items
“The acquisition of Stromag will provide Altra
with complementary products, greater presence in key geographic
regions, and penetration into new growth end markets,” said Carl
Christenson, Altra’s Chairman and CEO. “Stromag possesses a very
strong brand reputation and its highly engineered clutches, brakes,
torsional couplings and limit switches serve as excellent product
extensions for Altra. We see outstanding opportunities for our two
sales forces to cross sell products into new markets and we are
excited to utilize Stromag’s resources to further expand Altra’s
global customer coverage.”
“The combination also provides compelling
opportunities to leverage cost synergies through Altra’s supply
chain and Operational Excellence programs. Stromag brings a strong
and experienced management team, and we welcome them and the more
than 700 Stromag employees to Altra.”
Stromag is a market-leader with a strong
technology base and a heritage of providing tailored engineered
solutions for its customers. Its core products include an array of
clutches and brakes, flexible couplings, limit switches and
friction discs. Stromag serves the agricultural equipment,
construction, crane & hoist, marine, metal processing,
renewable energy and general industrial markets. Founded in 1932,
the business is headquartered in Unna, Germany and has operations
in Germany, France, the U.S., the UK, Brazil, India and China.
The closing of the transaction is expected to
take place during the first quarter of 2017 and is subject to
customary information and consultation processes with the Stromag
Works Council and trade unions as well as customary closing
conditions including the receipt of anti-trust approvals.
Altra will discuss the intended acquisition of
Stromag during Altra’s Third Quarter 2016 Investor Conference Call
scheduled for Friday, October 21, 2016 at 10:00 a.m. ET. The
public is invited to listen to the conference call by dialing
877-407-8293 domestically or 201-689-8349 for international access
and asking to participate in the ALTRA conference call.
About Altra Industrial Motion
Corp.
Altra Industrial Motion Corp., through its
subsidiaries, is a leading global designer, producer and marketer
of a wide range of electromechanical power transmission and motion
control products. The Company brings together strong brands
covering over 40 product lines with production facilities in eleven
countries. Altra's leading brands include Ameridrives Couplings,
Bauer Gear Motor, Bibby Turboflex, Boston Gear, Delroyd Worm Gear,
Formsprag Clutch, Guardian Couplings, Huco, Industrial Clutch,
Inertia Dynamics, Kilian Manufacturing, Lamiflex Couplings, Marland
Clutch, Matrix, Nuttall Gear, Stieber Clutch, Svendborg Brakes, TB
Wood’s, Twiflex, Warner Electric, Warner Linear, and Wichita
Clutch. [AIMC-G]
All statements, other than statements of
historical fact included in this release are forward-looking
statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995. These statements include, but are
not limited to, any statement that may predict, forecast, indicate
or imply future results, performance, achievements or events.
Forward-looking statements can generally be identified by phrases
such as "believes," "expects," "potential," "continues," "may,"
"should," "seeks," "predicts," "anticipates," "intends,"
"projects," "estimates," "plans," "could," "designed", "should be,"
and other similar expressions that denote expectations of future or
conditional events rather than statements of fact. Forward-looking
statements also may relate to strategies, plans and objectives for,
and potential results of, future operations, financial results,
financial condition, business prospects, growth strategy and
liquidity, and are based upon financial data, market assumptions
and management's current business plans and beliefs or current
estimates of future results or trends available only as of the time
the statements are made, which may become out of date or
incomplete. Forward-looking statements are inherently uncertain,
and investors must recognize that events could differ significantly
from our expectations. These statements include, but may not be
limited to, those relating to the Company's progress on corporate
initiatives, including its supply chain management initiative and
Operational Excellence program and expectations regarding
opportunities to leverage cost synergies through the initiatives as
a result of the Stromag acquisition, the Company's views and
assessment of economic conditions, the Company's expectations with
respect to sales, the Company's progress on executing its
acquisition and organic growth strategies, the Company’s
expectations regarding complementary products, greater presence in
key geographic regions and penetration into new growth end markets
as a result of the Stromag acquisition, the Company’s expectations
regarding opportunities for multiple sales forces to cross sell
products into new markets as a result of the Stromag acquisition,
the Company's progress and future plans on implementing and
pursuing consolidation and cost reduction activities and the cost
savings associated therewith, the timing of closing the Stromag
acquisition and the Company’s expectations regarding the extent and
timing of the accretive impact of the Stromag acquisition on
earnings.
In addition to the risks and uncertainties noted
in this release, there are certain factors that could cause actual
results to differ materially from those anticipated by some of the
statements made. These include: (1) competitive pressures, (2)
changes in economic conditions in the United States and abroad and
the cyclical nature of our markets, (3) loss of distributors, (4)
the ability to develop new products and respond to customer needs,
(5) risks associated with international operations, including
currency risks, (6) accuracy of estimated forecasts of OEM
customers and the impact of the current global economic environment
on our customers, (7) risks associated with a disruption to our
supply chain, (8) fluctuations in the costs of raw materials used
in our products, (9) product liability claims, (10) work stoppages
and other labor issues, (11) changes in employment, environmental,
tax and other laws and changes in the enforcement of laws, (12)
loss of key management and other personnel, (13) risks associated
with compliance with environmental laws, (14) the ability to
successfully execute, manage and integrate key acquisitions and
mergers, (15) failure to obtain or protect intellectual property
rights, (16) risks associated with impairment of goodwill or
intangibles assets, (17) failure of operating equipment or
information technology infrastructure, (18) risks associated with
our debt leverage and operating covenants under our debt
instruments, (19) risks associated with restrictions contained in
our Convertible Notes and Credit Facility, (20) risks associated
with compliance with tax laws, (21) risks associated with the
global recession and volatility and disruption in the global
financial markets, (22) risks associated with implementation of our
ERP system, (23) risks associated with the Svendborg, Guardian and
Stromag acquisitions and integration and other acquisitions,
including but not limited to risks related to the integration of
Stromag’s sales force, management team and other employees and
failure to close the Stromag acquisition, (24) risks associated
with the closure of the Company's manufacturing facility in
Changzhou, China, (25) risks associated with certain minimum
purchase agreements we have with suppliers, (26) risks associated
with our exposure to variable interest rates and foreign currency
exchange rates, (27) risks associated with interest rate swap
contracts, (28) risks associated with the potential dilution of our
common stock as a result of our convertible notes, (29) risks
associated with our exposure to renewable energy markets, (30)
risks related to regulations regarding conflict minerals, (31)
risks related to restructuring and plant consolidations, (32) risk
associated with the UK vote to leave the European Union and (33)
other risks, uncertainties and other factors described in the
Company's quarterly reports on Form 10-Q and annual reports on Form
10-K and in the Company's other filings with the U.S. Securities
and Exchange Commission (SEC) or in materials incorporated therein
by reference. Except as required by applicable law, Altra
Industrial Motion Corp. does not intend to, update or alter its
forward looking statements, whether as a result of new information,
future events or otherwise.
Contact:
Altra Industrial Motion Corp.
Christian Storch, Chief Financial Officer
(781) 917-0541
christian.storch@altramotion.com
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