International private equity firm The Carlyle Group has confirmed it is buying power transmission components manufacturer Rexnord Corporation from Invensys PLC for $880m.
The sale comes at a time when Invensys, which describes itself as 'a global leader in the management of production and energy resources,' has been looking to restructure its operations and shed various non-core businesses. For the financial year ending May 2002 it recorded a loss of £858m, compared to a profit of £150m in the preceding year. It is headquartered in London and was formed in 1999 through the merger of UK manufacturing conglomerates Siebe and BTR.
Rexnord, which is based in Milwaukee, has been producing flattop and industrial chain, bearings, couplings, gears and a variety of special components for over 100 years. Its products are used in plants and equipment in a wide range of industries, including food and beverage, energy, forest products, construction, cement production and aerospace. Jay Powell, a Carlyle Managing Director said, 'Rexnord is a strong business with excellent free cash flow dynamics and leadership positions in its markets.'
Carlyle also confirmed that George M. Sherman, former CEO of Danaher Corporation, will act as Non-Executive Chairman of Rexnord and will be an investor in the Company.
Although the financing mix for the acquisition has not been disclosed, the equity portion comes from Carlyle Partners III, L.P., Carlyle's US Buyout Fund. The transaction is expected to close by 31 January, 2003.