Altra Industrial Motion (AIMC) to Acquire GKN's Stromag

October 21, 2016 8:44 AM EDT

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Altra Industrial Motion Corp. (NASDAQ: AIMC) 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.



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