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Regal Rexnord Closes $297M Arrowhead Systems Deal

November 25, 2021

Regal Rexnord has completed its acquisition of Arrowhead Systems, a global leader in providing industrial process automation solutions, in an all-cash transaction valued at $297 million.

Arrowhead process automation solutions include conveyors, palletizers and depalletizers to the food and beverage, aluminum can and consumer staples (household goods, hygiene products, among others) industries. Arrowhead’s broad and deep capabilities in palletizing and conveying include a full suite of aftermarket services and solutions, which have been augmented through robust digitization investments to support industrial internet of things (IIoT), artificial intelligence (AI) and predictive maintenance capabilities.

"We are excited to welcome Arrowhead to Regal Rexnord," said Louis Pinkham, Regal Rexnord's Chief Executive Officer. "Arrowhead aligns nicely with our strategy to transform Regal Rexnord into a faster-growing, higher-margin enterprise. Its highly engineered automation and palletizer products and solutions – many of which directly support rising consumer demand for more environmentally friendly packaging – are differentiated and highly valued by its customers, evident in its strong organic sales growth rates and mid-30's gross margins."

"The business is also nicely complementary to our legacy Regal Rexnord motion control offering, which includes various engineered components and subsystems, supporting attractive revenue and cost synergies estimated at $12 million and an ROIC exceeding 10%, both by year 5."

Arrowhead joins Regal Rexnord as part of its Motion Control Solutions (MCS) segment.

Regal Rexnord’s innovative ModSort modular transfer and diverter stations can be easily added into new or existing conveyor systems to provide high-precision, 360-degree steering functionality for very lightweight items, such as polybags. ModSort modules, along with Regal Rexnord’s offerings of conveyor belts, chains, guides and components — now coupled with Arrowhead’s conveying and palletizing sub-systems and its design, fabrication and assembly capabilities — position the company to offer more value-added solutions to its customers, and do so in a broader array of end applications.

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