NEW YORK Emerson Electric Co has tapped Goldman Sachs Group Inc to sell its power transmission solutions business in a deal that could be worth more than $1 billion, people familiar with the matter said.
The industrial conglomerate is preparing for an auction in the fall and is in the early stages of contacting potential buyers, including other industrial companies and buyout firms, the people said on Wednesday.
The power transmission business is estimated to have earnings before interest, tax, depreciation and amortization of around $120 million, and could be valued at about 10 times that amount in a sale, some of the people added.
Emerson said in June that it was evaluating strategic alternatives for the power transmission unit and would announce plans for the business by the year-end.
A spokesman did not immediately respond to a request for comment, while Goldman Sachs declined to comment.
Emerson's move to divest the unit underscores efforts by large conglomerates to streamline their business lines and focus on high growth areas.
Currently part of the company's industrial automation business, the power transmission business is based in Florence, Kentucky, and has over 3,000 employees around the world, according to Emerson.
The business, which had 2013 revenue of more than $600 million, designs and manufacturers couplings, bearings, conveying parts, gearing and drive components among other products.
In a major deal in the same sector, Sweden's AB SKF, the world's biggest bearings maker, bought U.S.-based Kaydon Corp for $1.25 billion last year.
(Reporting by Soyoung Kim and Greg Roumeliotis in New York. Editing by Andre Grenon)