At the end of April 2015, RBC bearings announced that it has entered into a definitive agreement to acquire Dover’s Sargent Aerospace & Defense unit. The Sargent business unit was purchased by RBC for $500 million. The transaction is expected to close in the second calendar quarter of 2015, which is the same as the first quarter of fiscal year 2016.
RBC Bearings Inc. is an international manufacturer of highly-engineered precision plain, roller and ball bearings for use in industrial, defense and aerospace industries. They are headquartered in Oxford, Connecticut and will be celebrating 100 years of operation in 2019. There are currently 2,510 people employed by RBC over 25 manufacturing facilities in five countries.
Sargent is headquartered in Arizona and engineers precision components and aftermarket parts for aircraft airframes and engines, rotorcraft, submarines and land vehicles. They operate under Kahr Bearing, Airtomic, Sonic Industries, Sargent Controls, as well as Sargent Aerospace & Defense brands.
Sargent operates six facilities across three countries and employs a workforce of over 750. Through their facilities, they manufacture, sell, and service hydraulic valves and actuator, specialty bearings, specialty fasteners, seal rings and alignment joints. Their annual revenues are roughly $195 million. RBC financed the purchase with a combination of cash on hand and senior debt.
The estimated earning accretion from RBC is $0.25 to $0.35 per diluted share for the first twelve months of operations as a combined company. Based on a NPV basis approximately &78 million in tax benefits will be achieved as well as approximately $7.5 million in annual run-rate synergies achieved over a five year period. The transaction does not require shareholder approvals.
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