October 16, 2014 / 7:12 PM / 5 years ago

UPDATE 1-Timken, Regal Beloit, Altra vying for Emerson power unit -sources

(Adds background on the power unit and its industry)

By Greg Roumeliotis and Soyoung Kim

Oct 16 (Reuters) - Timken Co, Regal Beloit Corp and Altra Industrial Motion Corp are among those competing for Emerson Electric Co’s power transmission solutions business, according to people familiar with the matter.

Ball bearings maker Timken, electric motors manufacturer Regal Beloit, and Altra Industrial Motion, a producer of brakes, clutches and couplings, are through to the second round of bidding in the auction for the unit, the people said this week.

Private equity firms Warburg Pincus LLC and Onex Corp are also in the running for the unit, which is expected to fetch between $1.2 billion and $1.6 billion in a sale, the people added.

The sources asked not to be identified because details of the sale process are not public. Emerson, Timken, Regal Beloit and Warburg Pincus declined to comment, while Altra Industrial Motion and Onex did not respond to requests for comment.

Emerson said in June that it was evaluating strategic alternatives for its power transmission unit and has told investors it expects to announce a decision on its future by the end of the year.

Reuters reported in August that the Austin, Texas-based company had hired Goldman Sachs Group Inc to handle the sale process.

The power transmission business’s annual earnings before interest, tax, depreciation and amortization are currently seen at around $138 million, although some bidders view it as low as $120 million on an adjusted basis, according to one of the sources.

Emerson’s move to divest the unit underscores efforts by large conglomerates to streamline their business lines and focus on high-growth areas.

Currently part of the company’s industrial automation business, the power transmission business is based in Florence, Kentucky, and has over 3,000 employees around the world, according to Emerson.

The business designs and manufacturers couplings, bearings, conveying parts, gearing and drive components among other products.

In a major deal in the same sector, Sweden’s AB SKF , the world’s biggest bearings maker, bought U.S.-based Kaydon Corp for $1.25 billion last year. (Reporting by Greg Roumeliotis and Soyoung Kim in New York; Editing by Bernard Orr)

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