MagneTek, Inc., Nashville, Tenn., agreed to sell its electric motor division to A.O. Smith Corp., Milwaukee, Wis., for $250 million. The company subsequently announced plans to purchase the assets of three electronic drives businesses. The motor unit accounted for more than 30% of MagneTek's overall revenues. The sale is a move to position the company as a supplier of electronic and electrical power supplies, according to Robert Murray, vice president of communications for MagneTek. "We have been in the past predominantly into electrical equipment and we are now becoming an electronic power supply company," Murray said.
The acquisition would make A.O. Smith, a manufacturer of diversified products such as motors from 1/2 hp to 500 hp, water heaters and storage tanks, one of the largest players in the U.S. motor industry. Smith has bought two other motor companies within the last two years. In July 1998, the company acquired the domestic hermetic motor operations of General Electric. In March 1997, A.O. Smith purchased UPPCO, a manufacturer of sub-fractional horsepower C-frame motors.
A.O. Smith will continue to operate the MagneTek plants and plans to keep the current distributors of MagneTek's motor business.
On the drives, side, MagneTek has acquired EMS Inc., Electromotive Systems Inc. and EMS/Rosa Automation Engineering, Inc., a closely held group of companies in Cincinnati. The acquisitions will expand MagneTek's New Berlin, Wis.-based drives and systems business and make MagneTek one of the nation's largest suppliers of AC electronic drives, the company said. The EMS companies had revenue last year of more than $50 million.