RBC Bearings Incorporated (NasdaqGS:ROLL) signed a definitive agreement to acquire Mechanical Power Transmission Division of ABB Ltd for $2.9 billion on July 24, 2021. The consideration will be paid in cash. Goldman Sachs Bank USA is providing committed financing of $2.8 billion bridge loan for the transaction. Permanent financing is expected to include an appropriate mix of debt and equity, with strong deleveraging expected post-closing. On September 20, 2021, RBC Bearings Incorporated commenced the proposed offerings of the 3 million shares of its common stock and $400 million in aggregate liquidation preference of Series A Mandatory Convertible Preferred Stock to fund a portion of the cash purchase price for the acquisition of Mechanical Power Transmission Division of ABB Ltd. As of September 23, 2021, Roller Bearing Company of America, Inc., a wholly-owned subsidiary of RBC Bearings, has successfully priced an offering of $500.0 million aggregate principal amount of 4.375% senior notes due 2029. Additionally, RBC Bearings is offering 3 million shares of its common stock with estimated net proceeds of approximately $526.4 million. RBC Bearings is also in active negotiations with certain lenders to enter into the New Credit Agreement with its subsidiary, Roller Bearing Company of America, Inc., as borrower, which is expected to provide for certain term loans in an aggregate principal amount not to exceed $1.3 billion and a revolving credit facility in an aggregate principal amount not to exceed $500.0 million.

DODGE generated revenues of approximately $612 million, adjusted EBITDA of approximately $153 million, net income of $83.4 million, total assets of $1.36 billion and total equity of $1.15 billion for the 12 months ended June 30, 2021. DODGE's talented team will join RBC Bearings.

The transaction is subject to customary closing conditions, including regulatory review and antitrust regulations. The transaction is expected to close in the fourth calendar quarter of 2021. As of September 23, 2021, the transaction is expected to close in RBC's third fiscal quarter ending January 1, 2022. As of October 21, 2021, the transaction is expected to close before the end of 2021.The acquisition is anticipated to be immediately accretive to RBC Bearings' cash earnings per share. The proceeds from the transaction shall be used to fund organic growth, pay a rising sustainable dividend per share and make value-creating acquisitions.

JPMorgan Chase & Co. (NYSE:JPM) acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor for ABB Ltd (SWX:ABBN). Ingrid Vandenborre of Skadden acted as legal advisor to the ABB Ltd. Goldman Sachs & Co. LLC acted as the exclusive financial advisor to RBC Bearings. Goodwin Procter LLP acted as legal advisor and Michael Brueck, Francisco J. Morales Barrón and Daniel Wolf of Kirkland & Ellis LLP acted as financial advisor to RBC Bearings. Robert Matthew Katz of Latham & Watkins LLP acted as legal advisor to Goldman Sachs Bank USA.

RBC Bearings Incorporated (NasdaqGS:ROLL) completed the acquisition of Mechanical Power Transmission Division of ABB Ltd on November 1, 2021. ABB plans to use the proceeds from the transaction to fund organic growth, pay a rising, sustainable annual dividend per share over time, make value-creating acquisitions and if applicable return additional capital to shareholders through share buy backs. Kevin Smyth, Natasha vandenHoven and Jean-Guillaume Shooner of Stikeman Elliott LLP acted as a legal advisor to ABB Ltd.