Regal Beloit Corporation (NYSE:RBC) entered into a a definitive agreement to acquire Process & Motion Control Segment of Rexnord Corporation (NYSE:RXN) for $3.8 billion on February 15, 2021. Under the terms of the agreement, Rexnord will separate its Process & Motion Control (“PMC”) segment by way of a tax-free spin-off to Rexnord shareholders and then immediately combine it with Regal in a Reverse Morris Trust (“RMT”) transaction. Rexnord will spin-off the PMC Business by way of a pro rata dividend of all the outstanding common stock of Rexnord's wholly owned subsidiary, Land Newco, Inc. to Rexnord stockholders as of the record date for the dividend. Immediately following the spin-off Regal will acquire Land in a stock for-stock merger pursuant to which Land will become a wholly-owned subsidiary of Regal. Former holders of Land common stock will receive a fraction of a share of Regal common stock for each share of Land common stock they owned immediately prior to the merger. Regal is expected to pay a cash dividend to its shareholders who held Regal common stock on the record date for such Regal special cash dividend. The record date will be prior to the merger with a payment date following the merger. Immediately following completion of transaction, Rexnord stockholders will continue to own their shares of Rexnord common stock and will also own a number of shares of Regal common stock equal to the number of shares of Land they received in the Spin-Off dividend multiplied by the exchange ratio for the merger, and Regal shareholders will continue to own their shares of Regal common stock and will receive cash in an amount equal to the per share amount of the special cash dividend multiplied by the number of shares of Regal common stock they owned as of the record date for the Regal special cash dividend. The exact amount of the exchange ratio for the merger and the amount of the Regal special cash dividend will be determined closer to the closing date. Regal shareholders will own 61.4% and Rexnord shareholders will own 38.6% of the combined entity (New Regal), before a potential dividend to Regal shareholders and a corresponding ownership adjustment to Rexnord shareholders, sized at closing to ensure that RMT ownership requirements are met. Significant shareholder overlap between Regal and Rexnord shareholders, and the adjustment mechanism, will ensure that the RMT threshold of greater-than-50% ownership by Rexnord shareholders in New Regal, after factoring overlapping shareholders, is met in all circumstances. No fractional shares of Regal common stock will be issued in the merger, and instead Rexnord stockholders will receive cash in lieu of any fractional share of Regal common stock. Regal will change its name to Regal Rexnord Corporation and its shares of common stock will trade on the NYSE under the ticker symbol "RRX" and Rexnord will change its name to Zurn Water Solutions Corporation and its shares of common stock will trade on the NYSE under the ticker symbol "ZWS". Until closing, Regal and Rexnord will continue to operate independently. Once the transaction is closed, combined mechanical power transmission business will be renamed as, Rexnord, a Regal Company, and be headquartered in Milwaukee, Wisconsin. Regal will pay a termination fee of $150 million to Rexnord and, in certain other circumstances, Rexnord is required to pay a termination fee of $150 million to Regal. The transaction values PMC at $3.69 billion, representing 14.2x 2020 Adjusted EBITDA, or 9.7x after factoring run-rate cost synergies. Transaction value Includes $3.32 billion of Regal stock, priced at $128.82 using a 15-day VWAP, issued in the transaction and the assumption of $370 million of net debt, and excludes a $73 million post-tax pension liability to be assumed in the transaction. Regal has secured approximately $3.9 billion of committed financing. As of August 19, 2021 PMC segment will be re-named Motion Control Solutions (MCS), In addition, Kevin J. Zaba, currently President of PMC, will lead MCS and Jerry Morton, who currently serves as President of PTS will become President, Integration – Motion Control Solutions and will oversee the integration of PMC with PTS. Both Zaba and Morton will report to Regal CEO, Louis V. Pinkham. Upon closing, Regal will be led by its existing Board of Directors with the addition of two new directors from the Rexnord board of directors, mutually agreed upon by Regal and Rexnord. Rakesh Sachdev will continue as non-Executive Chairman of the Board. Regal's CEO, Louis Pinkham, will lead the combined corporate entity, which will continue to be headquartered in Beloit, Wisconsin. The transaction is subject to regulatory approvals, antitrust regulations appoval, Regal and Rexnord shareholder approvals, listing of shares of RMT Partner Common Stock on the New York Stock Exchange, effectiveness of Registration Statements and customary closing conditions. The transaction has been unanimously approved by the respective board of directors. The board of Regal recommends its shareholders to vote in favor of transaction. As of July 16, 2021, the waiting period under the HSR Act has expired. As of July 29, 2021, all the regulatory approvals for the transaction have been received. The special meeting of shareholders is scheduled for September 1, 2021. As of September 1, 2021, the transaction has been approved by stockholders of Rexnord Corporation. As of August 18, 2021, Rexnord received the private letter ruling from the U.S. Internal Revenue Service. The transaction is expected to close in the fourth quarter of 2021. As of August 18, 2021, the transaction is expected to close early in the fourth quarter of 2021. The transaction is expected to be accretive to cash EPS in year one after closing. Barclays Capital Inc. and Incentrum Securities, LLC are serving as financial advisors to Regal, and Scott Williams, Chris Hale, Suresh Advani, Rachel Kleinberg, Adam Snyder, Cameron Woolley, Bill Blumenthal, Vincent Brophy, Rosanna Connolly, Lauren Gallagher, Alexa Peterson, Li Wang, Richard Schneider, Peter McCorkel, Bethany Wise, Jim Weiss, Martha Clarke, Katie Sreenan, Vera Iwankiw, Susan Fanning, Chris Morgan, Mark Kaufmann, Kyle Barnett, Summer Danzeisen Heather Palmer, Sarah Jehl, Liz McCloy, Will Otter, Sujit Raman, Leslie Shubert, Barbara Broussard, Matthew Shankland, and Bart Biggers of Sidley Austin LLP is serving as legal counsel. Barclays is also providing Regal with committed financing. Citi and Michael E. Lubowitz of Evercore Group L.L.C. are serving as financial advisors to Rexnord, and Alec Dawson, Andrew Milano, Allison Gargano and Etienne Shanon of Morgan, Lewis & Bockius LLP is serving as legal counsel. Credit Suisse is providing Rexnord with committed financing. Mark Gentile and Stephanie Norman from Richards, Layton & Finger, P.A. served as a legal advisor for Rexnord Corporation. Caroline Gottschalk and Eric Swedenburg of Simpson Thacher acted as financial advisors to Incentrum Securities, LLC. Barclays acted as financial opinion provider to Regal in the transaction and Regal agreed to pay compensation of $19.7 million for its services and $2 million for opinion. Cleary Gottlieb acted as financial advisor to Barclays Capital Inc. Computershare Investor Services acted as transfer agent to Regal. Evercore will receive a fee of $15 million for its services, out of which $4 million will be paid for the fairness opinion. Hengeler Mueller Partnerschaft von Rechtsanwälten mbB acted as legal advisor to Regal. Regal has engaged Kingsdale Shareholder Services, U.S., Inc. to assist in the solicitation of proxies and will be paid a fee of $12500. Morrow Sodali LLC acted as proxy solicitor to Rexnord and will be paid a fee of $12,500, plus additional fees to be determined at the conclusion of the solicitation and reimbursement of reasonable expenses. Simpson Thacher & Bartlett LLP acted as legal advisor to Regal Beloit Corporation.

Regal Beloit Corporation (NYSE:RBC) completed the acquisition of Process & Motion Control Segment of Rexnord Corporation (NYSE:RXN) on October 4, 2021. Following completion of the transactions, Regal will change its name to "Regal Rexnord Corporation" and its shares of common stock will trade on the NYSE under the ticker symbol "RRX."