Regal Beloit buys Chinese motor companies for $27.6 mln

Regal Beloit Corp., a U.S. provider of mechanical and electrical motion control and power generation products, said late Friday it acquired China-based Wuxi Hwada Motor Co. and Wuxi New Hwada Motor Co. for about $27.6 million in cash and the assumption of about $8 million in debt.

The two Chinese companies, based in east China's Jiangsu province, design and make electric motors used in industrial applications such as compressors, pumps, paper and steel processing, and power plants. The product line includes motors up to 5,000 kilowatts.

Under the agreement, Regal Beloit also will pay to the seller up to $8.5 million upon the sale of certain Hwada property rights, the company said.

About 50 percent of Hwada's product sales are in the China industrial markets, while the rest is exported to Europe, the United States and Southeast Asia.

Regal Beloit said the business is expected to boost its 2008 earnings per share by 4 cents to 6 cents and its sales by $75 million to $80 million.

Shares of Regal Beloit closed the regular session up 43 cents at $36.75.