Although the sale is not final, both Tecumseh Products Company and Regal Beloit Corporation have issued news releases announcing that the companies have signed an agreement whereby Regal Beloit will acquire Tecumseh's Fasco operations for $220 million.
The agreement was made public by Tecumseh and Regal Beloit on July 3, but no official announcement has been made by local plant officials in Cassville.
Regal Beloit is only purchasing Fasco businesses that manufacture and market motors and blower systems for air moving applications, including alternative fuels systems, water heaters and HVAC systems. Tecumseh's Fasco automotive/speciality business is not part of the transaction.
Under the definitive agreement, Regal Beloit will acquire manufacturing and distribution facilities in Cassville, Eldon, Piedras Negras, Mexico, Bangkok, Thailand, and Melbourne, Australia.
"Fasco is a great business with a long history of product and manufacturing excellence," said Henry W. Knueppel, chairman and chief executive officer of Regal Beloit. "We are very excited about the people, facilities and technology that are the foundation of these acquired businesses."
Officials with Tecumseh said the sale of its Fasco business was part of the corporation's efforts to pay off debt.
"This is another important step in our ongoing efforts to reduce the company's debt, sharpen its strategic focus and improve its financial performance," said James J. Bonsall, Tecumseh's president and chief operating officer.
"Regal Beloit Corporation, as a worldwide leader in electrical motion control products, will be well positioned to further develop and grow these businesses as part of its overall product portfolio," added Bonsall.
According to the Tecumseh press release, the completion of the sale was subject to regulatory approval by the Federal Trade Commission and other customary closing conditions. The transaction is expected to be completed in the third calendar quarter.
Regal Beloit, headquartered in Beloit, Wisc., is a leading manufacturer of mechanical and electrical motion control and power generation products serving markets throughout the world. The company has manufacturing, sales and service facilities throughout the United States, Canada, Mexico, Europe and Asia.
During Monday night's Cassville city council meeting, local attorney Don Cupps referenced the sale of Fasco and presented aldermen with two agreements lawyers for Regal Beloit and Tecumseh wanted the council to approve. The agreements have to do with a long-standing lease agreement between the city and Fasco.
The City of Cassville owns the property on Sale Barn Road where the company built its plant back in 1974. The city has been leasing the property to Fasco and then to Tecumseh for $9,000 a year. This agreement is due to expire in September of 2009. Attorneys are asking that the city transfer the lease from Tecumseh to Royal Beloit.
Council members voted to table action on the agreements until the next council meeting, which will be held Aug. 6. Aldermen said they needed more time to review the documents, which were presented to them by Cupps near the end of Monday night's council meeting.
Fasco first announced its plans to locate a plant in Cassville back in April of 1974. The Cassville Industrial Development Corporation (IDC), the Cassville Area Chamber of Commerce and the City of Cassville were instrumental in the company's plans to expand to Cassville.
The city purchased 41.44 acres of land on Sale Barn Road from Mr. and Mrs. Rufus Miller for $47,000 and this became the site for the new Fasco plant. Another four acres, located next to the Miller property, were donated to the city by Mr. and Mrs. Royle Ellis.
On May 21, 1974, the citizens of Cassville voted 548-9 to issue $250,000 in general obligation bonds to extend water and sewer to the plant location and approved a $3 million industrial revenue bond to help finance construction of the plant. The industrial revenue bonds were paid back by Fasco over a 20-year period.