Regal-Beloit Sells Local Division
The president and CEO of the company that has purchased a division of Regal-Beloit has big plans for the local facility. Jobs will remain, and possibly more workers and additional manufacturing space could be added, if YG-1's Hokeun Song has his way.
Gene Ziemba, vice president and general manager of Regal Cutting Tool, said Song addressed workers earlier this week, giving an overview of his company's purchase of the cutting tool division.
Regal Cutting Tool is the original arm of Regal-Beloit, a company founded more than 50 years ago in Beloit. Originally a cutting tool company, Regal-Beloit has moved away from the cutting tool business in recent years and acquired a number motor and power generator companies.
Today, only about $17 million of Regal-Beloit's $1.5 billion in sales comes from the cutting tool division.
YG-1 was founded in 1981, and today is the world's largest end mill manufacturer. The company, based out of Incheon City, Korea, distributes goods to 70 countries and did $150 million in sales last year.
The company currently has its U.S. office and a small manufacturing plant in Vernon Hills, Ill. In addition to buying the Regal Cutting Tool division along Rockton Road in South Beloit, YG-1 also acquired a cutting tool facility in Loris, S.C. That facility has about 75 employees, while the cutting tool plant in South Beloit has 200 workers between the manufacturing plant and the office.
Buffett Takes Stake in Iscar
Warren Buffett’s investment company Berkshire Hathaway has taken an 80 percent stake in Israel’s Iscar Metalworking Companies (IMC) for $4 billion, representing the largest deal ever involving an Israeli technology company.
Iscar is privately owned by the Wertheimer family and is a world leader in the production of metal cutting tools and machining technology. The Wertheimer family will retain a 20 percent stake in the company.
Based in Tefen in northern Israel, Iscar has production facilities and offices around the world.
Iscar has never published official figures on its sales or revenues. But local experts estimate 2005 sales at more than $1 billion with net profit of more than $250 million. Wertheimer said that company sales have been growing at an annual rate of 15 percent. Iscar expects its financial figures will remain under wraps following the deal as they would be included in those of Berkshire Hathaway.
After becoming a part of Omaha-based Berkshire, IMC will continue to be managed by Chairman Eitan Wertheimer, son of the founder Stef Wertheimer, and president and CEO Jacob Harpaz.
News of the deal broke just hours before Berkshire Hathaway held its annual stockholders meeting in Omaha. In an interview with Israel Radio, Mr. Buffett said none of the 2,000 Israelis working for Iscar in Israel would lose their jobs. He noted this was the first time since 1965 that he could make such a promise. Iscar employs another 4,000 workers in various parts of the world.
Iscar began as a small welding shop in the 1950s. The deal includes all of Iscar’s subsidiaries but excludes Iscar Blades, the maker of cutting tools for the aerospace industry.
The deal must be approved by Israeli and American regulators. The acquisition represents the largest non-American company ever purchased by Buffett and the third-largest deal ever for Berkshire.