The US motor-maker Regal Beloit Corporation (RBC) has acquired Australia’s CMG Engineering Group, which manufactures and distributes fractional horsepower motors, blower systems, and industrial metal products. RBC is paying about $75m in cash, assuming around $5.5m in net liabilities, and contributing 100,000 shares. It expects the deal to add about $92m to its sales.
CMG has operations in Australia, New Zealand, South Africa, Malaysia, Singapore, the Middle East, and Telford in the UK. In Australia and New Zealand, it also distributes integral horsepower industrial motors, mechanical power transmission products, material-handling equipment, electrical insulating materials, magnet wire, and specialty conductors. Its sales for 2011 are expected to be worth around $128–135.5m.
For Regal Beloit, CMG’s attractions include its strong and expanding operations in the AsiaPacific region, South Africa, and the Middle East. According to RBC chairman and CEO, Henry Knueppel (above), the acquisition “further expands the infrastructure necessary to significantly expand our commercial efforts in these critical regions.”
He adds that CMG “has an outstanding management team that has continuously grown the business at a multiple of market growth rates. Given this track record, and the opportunities that RBC can bring to CMG, we are very confident that we will see accelerated growth.
“The combination of CMG and Regal Beloit’s Asia-Pacific operations creates both a leading commercial and manufacturing footprint and an opportunity to take advantage of significant synergies between the organisations,” Knueppel continues. “CMG is a perfect fit to further complete this portion of our globalisation strategy.”
Jack Gringlas, CMG’s owner and the son of its founder, says he is “confident that we have found the ideal acquirer for our business. RBC will provide the best platform to secure the future of the CMG business and its team of experienced and dedicated staff.” Gringlas will be staying on as the group’s managing director
CMG is the latest in a string of acquisitions that Regal Beloit has made around the globe in recent years. In 2007, it bought the fractional horsepower motor manufacturer, Morrill Motors as well as Alstom’s Indian motors and fans business. It also acquired the Fasco motors business, once owned by Invensys, for $220m.
In 2008, it bought the Chinese motor-maker Hwada for $27.6m and followed this by acquiring the Netherlands-based motor distributor Dutchi Motors, for $34m. Hwada is a key supplier to Dutchi, which claims to be Europe’s largest stockist of LV motors.
Regal Beloit was founded in 1955, initially as a manufacturer of cutting tools and gearboxes. Since Knueppel joined the company in 1979 and initiated a strategic acquisition programme to expand the business, RBC has acquired more than 30 companies and product lines. It now has more than 17,000 employees and more than 50 manufacturing and other facilities around the globe.
CMG was founded by Mietek Gringlas in 1948. Initially, he manufactured and repaired electric motors in his garage. In 1955, CMG moved to its first factory in a suburb of Melbourne. A second factory opened in 1962.
CMG has since expanded internationally, as well as acquiring related companies in its home market, such as the metals products specialist Sankey, the mechanical power transmission supplier Transmission Australia, the insulation and conductors specialist OBA, and the fan and blower manufacturer Torin Industries. It is Australia’s only remaining electric motor manufacturer.
