RTTNews | Jul 26, 2021 11:04AM EDT

11:03 Monday, July 26, 2021 (RTTNews.com) - Shares of engineered precision bearings and components maker RBC Bearings Incorporated (ROLL) are surging more than 16% Monday morning after the company announced its decision to acquire DODGE mechanical power transmission unit of Asea Brown Boveri Ltd for $2.9 billion in cash.

DODGE, that primarily operates across the construction and mining aftermarket, food & beverage, warehousing and general machinery verticals, had revenue of about $617 million in the 12 months ended June 30, 2021.

The acquisition is expected to add to RBC's cash EPS by 40% to 60% in the first full fiscal year after close. The company expects cash EPS to be in the range of $7.00 to $8.00 per share in the first full fiscal year.

Additionally, the transaction is expected to generate annual pre-tax run-rate synergies of approximately $70 million to $100 million by fiscal year 2026.

"Our businesses are highly complementary, with DODGE bringing new offerings, new end markets, and more scale to the combined organization. The combined company will have an attractive position in the Aerospace, Defense and Industrial markets with a diversified client base and expansive geographic footprint. We look forward to welcoming DODGE's talented team to RBC Bearings," RBC Bearings Chairman, President and Chief Executive Officer, Dr. Michael J. Hartnett, said.

The deal is expected to close in the fourth calendar quarter of 2021.

ROLL touched a new high of $245.09 this morning, before slipping to trade at $239.80 currently.

Read the original article on RTTNews ( https://www.rttnews.com/3211888/rbc-bearings-rallies-16-to-buy-abb-s-dodge-mechanical-power.aspx)

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