Shares of Altra Industrial Motion Corp.
rocketed 48.1% toward an 11-month high in premarket trading Thursday, after the electromechanical power transmission motion controls company announced an agreement to be acquired by Regal Rexnord Corp.
in a cash deal with an enterprise value of $4.95 billion. Regal’s stock was still untraded in the premarket. Under terms of the deal, Altra shareholders will receive $62 in cash for each Altra share they own, which is a 54.0% premium to Wednesday’s stock closing price of $40.25 and implies a market capitalization for Altra of $4.03 billion. The companies expects annualized cost synergies of $160 million by the fourth year after closing, which is expected to occur in the first half of 2023. “The sale of Altra to Regal Rexnord will provide our shareholders with immediate and substantial cash value, as well as a compelling premium, and the Board of Directors has agreed that this transaction is in the best interests of our shareholders,” said Altra Chief Executive Carl Christenson. Altra’s stock dropped 22.0% year to date through Wednesday and Regal shares have lost 10.5%, while the S&P 500
has declined 19.6%.
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