ABB to sell Dodge mechanical power transmission division for $2.9B
July 26, 2021 by Manufacturing AUTOMATION
ABB plans to sell Dodge, its mechanical power transmission division, to RBC Bearings Incorporated for $2.9 billion in cash.
The deal, expected to close by the end of 2021, will create a manufacturer of highly engineered, performance-critical bearings and motion control components.
For more than 140 years, the Dodge business has specialized in the design, production and marketing of mounted bearings, enclosed gearing and power transmission components.
It offers a wide range of mechanical power transmission products in the market, selling to industries such as surface mining, aggregates and cement, warehousing, and food and beverage.
Dodge has roughly 1,500 employees worldwide and posted revenues of approximately $600 million for the last 12 months ending June 30, 2021, of which more than 90 per cent were generated in the Americas.
The operating EBITA margin was approximately 23 per cent. Dodge produces at six manufacturing sites – five in the U.S. and one in China – and its headquarters is located in Greenville, S.C.
“We are delighted that Dodge has found an excellent new home with RBC Bearings, where it can continue its exciting growth story,” says Björn Rosengren, ABB CEO.
“This transaction further strengthens ABB’s balance sheet. In line with our capital allocation priorities, we plan to first use the proceeds from the transaction to fund organic growth, pay a rising sustainable dividend per share and make value-creating acquisitions.”
Rosengren said an update is forthcoming on the sale of ABB’s turbocharging business, as well as on speculation that the company may list its e-mobility division.
“The combination will enhance RBC Bearings’ capabilities, footprint, and customer access while increasing our exposure to Dodge’s attractive end markets,” says Dr. Michael J. Hartnett, chair, president and CEO of RBC Bearings.
“Our businesses are highly complementary, with Dodge bringing new offerings, new end markets, and more scale to the combined organization. The combined company will have an attractive position in the aerospace, defence and industrial markets with a diversified client base and expansive geographic footprint. We look forward to welcoming Dodge’s talented team to RBC Bearings.”