The Timken Company has reached an agreement to sell its belts operations to Gates Industrial Corporation, company officials announced Friday.
The Ohio-based supplier of bearings and industrial motion products said that the move reflects a broader effort to “structurally improve margins, grow faster in the most profitable verticals and create value for shareholders.” The belts business, which serves industrial, commercial and consumer applications, would particularly improve adjusted EBITDA margins in its industrial motion segment, officials said.
“We are applying this same rigor across our portfolio to ensure we leverage our core competencies where they drive the greatest impact,” Timken President and CEO Lucian Boldea said in the announcement.
The transaction is expected to close in the third quarter of the year, subject to customary closing conditions. The company said that the proceeds would go toward its “capital allocation priorities;” specific financial terms of the proposed deal were not disclosed.
Boldea also thanked “our dedicated belts colleagues for their contributions over the years,” but did not indicate how many positions could be impacted by the deal. He said that Gates, a “global leader in power transmission products,” is “the right owner to guide this business forward."
"Gates is expanding customer access and opportunities in priority markets, such as the industrial OEM and aftermarket channels, as well as the power sports segment of our mobility business unit,” Gates Americas President Tom Pitstick said in a statement. “The acquisition of the belts business from Timken broadens our channel and application coverage."
