Date: 2013-08-01

Rockwell Automation to Divest Bearing Business

Rockwell Automation Inc. (USA; NYSE: ROK) has announced plans to sell off its two Power Systems division business units: Reliance Electric motor and motor repair, and Dodge mechanical components.

Currently, Rockwell is made up of two operating divisions: Power Systems, which contributes approximately 12% of sales, and Control Systems which contributes 88% of sales.

Headquartered in Greenville, South Carolina, Power Systems has total sales approaching USD $1 billion and delivers operating income of approximately $150 million.

Dodge manufactures a wide variety of bearings, gears and other power transmission components. On the bearing side, it offers mounted and unmounted bearings: ball, tapered roller, spherical roller, hydrodynamic, plain sleeve and journal bearings. For mounted bearings, it offers mounted ball bearings, take-up frames, and other components.

In 2004, the Dodge bearing plant in Marion, North Carolina was selected as one of IndustryWeek's Top Ten Best Plants. Opened in 1996, Marion produces 2,600 different Dodge branded mounted bearings -- spherical and tapered roller -- in IDs from 1-3/16" to 5".


Rockwell was somewhat vague about the fundamental reasoning behind jettisoning Power Systems. Management attributed the decision variously to timing, an altruistic wish to see Power Systems fly free to succeed elsewhere, or generate cash for share buybacks, or for growing its other businesses.

CFO James Gelly told analysts: "We're not selling Power Systems out of financial need. We're separating these two part of Rockwell because each deserves capital investment to fuel aggressive global growth strategies."

Keith D. Nosbusch, President, Chairman, and CEO of Rockwell Automation, said: "Power Systems is a great business with an outstanding management team, strong domain expertise, and leading market positions. It has contributed substantially to Rockwell Automation

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