Invensys, the international production technology and energy management group, has agreed to sell its Rexnord business to The Carlyle Group, a US based private equity firm, for a gross consideration of $913 million, less $33 million in respect of working capital, giving net proceeds of $880 million.
The sale proceeds will be used by Invensys to continue to reduce its level of indebtedness.
Rexnord is a leading global supplier of power transmission components, conveying equipment, bearings, chains, couplings, drives, motor brakes and idlers for industries world-wide.
For the twelve months ended March 31, 2002, the business generated revenues of $724 million and operating profit of $104 million. Net assets, which are the subject of the transaction, are approximately $410 million. Goodwill written off to reserves, relating to the businesses being sold, amounts to approximately $860 million.
The impact on Group shareholders’ funds will be an increase of approximately $470 million.
The sale of Rexnord is consistent with Invensys’ objectives to divest non-core assets as part of its overall plan to improve its capital strength.
The transaction is expected to complete by the end of November 2002 and is subject to customary regulatory approvals and the completion of financing by The Carlyle Group.