Generator powerhouse Generac Holdings Inc., Waukesha, Wis., said it signed a purchase agreement with Baldor Electric Co., a wholly-owned subsidiary of ABB Group, to acquire substantially all of the assets of Baldor’s generator products division, located in Oshkosh, Wis. The acquisition is expected to close in the fourth quarter of 2013, pending standard closing conditions. Generac declined to disclose terms.
Baldor Generators produces a complete lineup of portable, mobile, standby and prime power generators ranging from 3kW to 2.5MW marketed throughout North America. The product mix includes larger generators that serve a market where Generac wasn’t active, Terry Dolan, executive vice president of commercial and industrial business for Generac Power Systems, told Electrical Marketing.
“We’ve been making significant investments into the commercial and industrial sector, as we see tremendous opportunities to support not only industry but commercial businesses with backup power as companies look to improve their business-continuity plans and power generation becomes part of that,” Dolan said.
“In North America, our product line has typically gone up to 600kW in a single set, and then Generac innovated in the category by creating what we refer to as our MPS system (Modular Parallel System), so if somebody wanted a 2MW unit, we would provide them four 500kW units in parallel,” Dolan said. “We also realized there were a lot of customers who were building much larger systems, who needed larger products up to 2.5MW, and even greater than that. We wanted to put larger sets in parallel, and it was a product category we didn’t have, so we’ve looked for different ways to get there — organically, by us designing and developing it on our own, or through a relationship like this by acquiring a company like Baldor. So what Baldor does is expand our product line into that category for both stationary and mobile.”
Magnum Power Products, a business Generac acquired in 2011, serves the mobile and rental markets with generators up to 465 kVA. The addition of the Baldor lines gives Magnum the ability to offer up to 2MW of containerized trailer units.
Following the close of the transaction, the employees of Baldor Generators will become employees of Generac and the Oshkosh facility will become part of Generac’s manufacturing footprint, which will now consist of six production facilities in Wisconsin. Although the Baldor brand name is not included past a transition period, Generac will continue to support Baldor Generator’s existing customers and distribution network, the company said.
Dolan declined to discuss changes to the sales channels until after the deal closes. Both Baldor and Generac sell generators through networks of dealers who handle everything from sales to installation, commissioning, service and warranty support, and will continue to do so, Dolan said.
The addition of Baldor’s lines may also boost Generac’s global growth ambitions, Dolan said, particularly its sales through Ottomatores, which Generac acquired in 2012 to serve Mexico and Latin America.
“Acquiring Baldor Generators is a great strategic fit for Generac’s business, providing us immediate access to a larger industrial product line to better support the North American and global power generation markets,” said Aaron Jagdfeld, president and CEO of Generac, in a release announcing the deal. “By offering additional power solutions up to 2.5MW, this acquisition improves our competitive position in the marketplace by increasing the addressable market that our distribution partners can serve.”
