Altra Industrial Movement surges on Regal Rexnord $5 billion bid (NASDAQ:AIMC)

Altra Industrial Movement (NASDAQ:AIMC) on Thursday jumped 48% after Regal Rexnord (NYSE:RRX) agreed to purchase the maker of merchandise utilized in industrial automation for $4.95 billion. Conversely, Regal Rexnord slumped 13% after saying the deal and providing a peek at Q3 outcomes.

Regal Rexnord supplied $62 a share within the all-cash transaction, which is predicted to shut within the first half of subsequent 12 months after receiving shareholder and regulatory approvals. The provide is 54% larger than Altra’s closing worth of $40.25 a share on Oct. 26.

“The automation enterprise has extremely enticing development prospects and margins, serving many markets which have anticipated secular development tailwinds, together with manufacturing unit automation, medical, aerospace and warehouse and logistics,” Louis Pinkham, CEO of Regal Rexnord, mentioned in a press release saying the deal.

With the addition of Altra, Regal Rexnord expects 2022 professional forma income of about $7.2 billion, adjusted EBITDA of roughly $1.5 billion and an adjusted EBITDA margin of roughly 21%.

Preannounced Q3 Outcomes

Regal Rexnord additionally revealed some key monetary data from its Q3 earnings announcement, which shall be on Oct. 31 earlier than inventory markets open for normal buying and selling.

The corporate expects to report adjusted diluted earnings per share of $2.66, which beats the present Wall Avenue estimate by $0.03.

Web gross sales for Q3 are anticipated to be $1.33 billion, up 49% from a 12 months earlier.

For the complete 12 months, Regal Rexnord now expects adjusted diluted earnings per share to be in a variety of $10.35 to $10.75.

The steering does not embody any prices, bills or different results of the takeover of Altra, in accordance with Regal Rexnord.

“Importantly, Regal Rexnord and Altra are a terrific cultural match, with a shared dedication to integrity, buyer success, and steady enchancment,” Pinkham mentioned. “We’re assured that these shared values and complementary companies will assist facilitate a seamless transition and help our continued success.”