Zacks_Analysts' Blog : Regal Beloit Expands in Virginia - Analyst Blog

Regal Beloit Corporation (RBC) recently announced that it has acquired Virginia-based Ramu, Inc., a motor and control technology company controlled by the venture capital firm Khosla Ventures.

Ramu, Inc. specializes in the development of switched reluctance motor technology. Switched reluctance technology is a unique motor design suitable for applications requiring improved operating efficiencies, high operating speeds or high ambient temperature conditions. One primary advantage of switched reluctance is that it does not utilize permanent magnet materials to create the operating torque of the motor.

Ramu Inc.'s technology remains in the development stage and has yet to generate any operating revenues. This technology will be integrated into Regal Beloit’s energy efficiency motor portfolio. Meanwhile, current management at Ramu, Inc. will continue to focus on expanding Ramu, Inc.'s current portfolio of multiple patents and patent applications as well as integrating this technology into Regal Beloit's broad motor portfolio for commercialization across multiple Regal Beloit brands.  

Earlier, Regal Beloit acquired the electric motor business of rival A.O. Smith Corp (AOS">AOS) for approximately $875 million. The sale will be completed in the second half of 2011.

In February, A. O. Smith Corporation and Regal Beloit announced that both of them have received a request for additional information and documentary material from the U. S. Department of Justice regarding the sale of A. O. Smith Electrical Products Company to Regal Beloit.

Regal Beloit expects that the acquisition will add annual sales of over $700 million in the first full year following the acquisition. Excluding one-time items, the acquisition will  be accretive in the first full year to the bottom-line.