S&P gives Regal Rexnord BB+

S&P said it gave a BB+ issuer rating to Regal Rexnord Corp. with a stable outlook.

Regal Rexnord Corp. is expected to acquire Altra Industrial Motion Corp. in early 2023 for about $5.1 billion, using $5 billion of new debt to fund the acquisition and refinance Altra's debt.

“Regal's acquisition of Altra will strengthen its existing motion control business and significantly increase its presence in the higher-growth automation end market. We expect the company to merge Altra's power transmission segment with its existing motion control solutions segment, which will therefore increase in revenue by about 30%. In addition to better scale, Altra's product portfolio will increase Regal's share of the wallet of certain industrial subsystems sold to customers,” S&P said in a press release.

The outlook reflects the expectation that Regal will focus on paying down debt and lower its S&P Global Ratings-adjusted leverage to under 4x over the next 12-18 months and remain below this level, the agency said.

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