Industrial Power Sector Highlighted by M&A (BEZ, ABB, AOS, RBC, AME)
Baldor Electric Co. (NYSE: BEZ) is a company most investors have either never heard of or that they decided to not care about. Many might even guess it is even in a different sector than what it really does for its operations. The Fort Smith, Arkansas-based outfit is being acquired and this may highlight several issues.
ABB Ltd. (NYSE: ABB) and Baldor announced a pact where ABB would acquire Baldor for $63.50 per share. The overall transaction value is listed as $4.2 billion, if you include the net debt of $1.1 billion. The current market cap after a 40% pop is right at $3 billion.
We wanted to see if this has had any impact on Baldor’s peers. Baldor Electric Company markets, designs and manufactures industrial electric motors, mechanical power transmission products, drives and generators. The company employs close to 7,000 people. ABB employs about 117,000 worldwide.
A.O. Smith Corp. (NYSE: AOS) also has exposure in electric motors for the residential, commercial, and industrial markets. It is no shock that it is higher and shares are up almost 7% at $39.64. The 52-week trading range is $27.39 to $40.24 and its market cap is listed as $1.8 billion.
Regal Beloit Corporation (NYSE: RBC) is also higher as it makes and sells electrical and mechanical products to original equipment manufacturers, distributors, and end users. Its shares are up 5.3% at $61.39, its 52-week trading range is $45.61 to $67.32, and its market cap is currently $2.37 billion.
AMETEK, Inc. (NYSE: AME) is probably considered more indirect than Regal Beloit and than A.O. Smith. It manufactures and sells electronic instruments and electromechanical devices in two segments: Electronic Instruments Group and Electromechanical Group. AMETEK is up 2.0% at $59.26 and it hit a new 52-week high. The 52-week range is $35.64 to $59.37. One other issue to consider is its larger market cap, listed as $6.3 billion.
JON C. OGG