BTR buys American conveyor belt maker: Conglomerate to pay dollars 415m for Rexnord

BTR clicked back into acquisition mode yesterday with a dollars 415m agreed bid for Rexnord, a leading US manufacturer of components for conveyor belts and industrial transmission systems, based in Milwaukee, Wisconsin, writes Terence Wilkinson.

Initially, BTR Dunlop Holdings Inc is acquiring a majority in Rexnord from Fairchild Corporation and another institutional shareholder. It will then make a general offer for the remaining shares.

In a de-gearing exercise, Fairchild floated Rexnord in July last year, retaining a 44 per cent stake. In 1988 Fairchild had acquired PT components and merged it with Rexnord, its main competitor.

Rexnord made operating profits of dollars 82.7m on sales of dollars 532.5m in the year to June, and net earnings before extraordinary items of dollars 23.9m. Net assets stood at dollars 504m on 30 September, when Rexnord's borrowings amounted to dollars 400m.

Alan Jackson, chief executive of BTR, said the acquisition would bring a new range of products into BTR. He saw great potential for substantially increasing Rexnord's sales in Asia and Europe.

He said the acquisition was in line with BTR's policy of concentrating resources in manufacturing operations.

Rexnord employs 4,700 people on 14 manufacturing sites, 11 in the UK and three elsewhere in Europe.