A major industry manufacturer has sold its decades-old pool and
spa pump motors division.
Milwaukee-based A.O. Smith, which had been in the motors business
for approximately 60 years, completed the sale to Regal Beloit
Corp. in late August.
The deal, which included A.O. Smith’s entire Electrical
Products segment, was worth an estimated $875 million in cash and
“We did have a strong position in the motors segment, so this
was a tough decision for us,” said Mark Petrarca, senior vice
president of human resources and public affairs at A.O.
“In fact, it was a troubled business for a long time, and it
took a lot of work bringing it back to profitability,” he
added. “But looking ahead, there weren’t a lot of
viable alternatives to grow it here. So we decided if we
couldn’t be No. 1 or 2 in the motor business, we wanted it to
be part of a company that could.”
The acquisition, which was announced in December but required
regulatory approval by the U.S. Department of Justice, covers
nearly 8,000 employees at manufacturing plants around the world.
A.O. Smith’s Electrical Products segment produces motors for
a number of residential and commercial applications, among them
pool and spa pumps.
But that aspect of the business was significant enough to prompt a
lengthy review by the DOJ, which ultimately required Regal Beloit
to sell its own business for electric pool and spa pump motors
before the transaction could be completed. That sale, to
Phoenix-based SNTech, also took place in late August; it was worth
a reported $23.4 million.
Reviews by the DOJ are fairly typical in cases where two companies
in the same industry join forces. Regulators will examine any
overlapping businesses to ensure an acquisition doesn’t put
the public at a disadvantage through inflated prices or diminished
customer service, or create a monopoly in the marketplace.
“The acquisition as originally proposed would have lessened
the vigorous competition that currently exists among manufacturers
of electric motors for pool and spa pumps, resulting in higher
prices and lower quality products,” said Sharis Pozen, acting
assistant attorney general in the DOJ’s Antitrust Division,
in a written statement.
This is at least the second significant purchase of a key player in
the pool and spa pump motors category of late. Last year, Emerson
Electric Co. sold its motors and controls businesses to Japan-based
Nidec Corp. for more than $800 million, according to published
With the company’s motors assets now belonging to Regal
Beloit, A.O. Smith is set to focus on its water technologies unit.
That segment accounted for the majority of A.O. Smith’s $1.5
billion in revenues for 2010.
A representative from Regal Beloit, based in Beloit, Wis., could
not be reached for comment by press time.