March 7, 2018 / 12:33 PM / 17 days ago

Altra Industrial to buy Fortive units in $3 billion deal

(Reuters) - Altra Industrial Motion Corp (AIMC.O) said on Wednesday it would buy four units of Fortive Corp’s (FTV.N) automation & specialty business in a $3 billion deal to bolster its presence in the power transmission and motion control industry.

The deal comprises $1.4 billion in cash and debt and $1.6 billion in newly issued shares to Fortive’s shareholders, the companies said in a statement.

Altra makes mechanical power transmission components used in industrial applications. Fortive’s automation & specialty business makes mechanical parts such as clutches and brakes.

Structured as a Reverse Morris Trust deal, the transaction will be tax-free for shareholders.

Fortive will contribute a part of its automation and specialty business to a new wholly owned unit of Fortive which with then merge with a unit of Altra.

“With Fortive A&S, we gain exposure to industries with attractive secular growth dynamics, including the medical, robotics, factory automation and food and beverage industries,” Altra Chief Executive Officer Carl Christenson said in a statement.

    The deal is expected to close by end of 2018.

    Goldman Sachs & Co is Altra’s financial adviser, while UBS Investment Bank advised Fortive.

    Reporting by Sanjana Shivdas in Bengaluru; Editing by Saumyadeb Chakrabarty

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