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Altra Overview

In October 2018, Altra merged with Fortive Corporation’s Automation and Specialty (A&S) business to create a premier company specializing in highly engineered products, software and service solutions. Today, Altra is solidly positioned with:

  • Leading positions across a diverse set of end markets and specialty niche industries with attractive secular trends
  • A broad portfolio of operating companies with an excellent margin profile and significant margin expansion potential
  • Strong free cash flow generation supporting quick de-levering
  • A proven world class business system

Why Invest

Premier Global Leader

Strong Market Position

Margin Expansion Potential

Strong Free Cash Flow

World Class Business System

A Premier Global Company with a
Well-Established History

  • Organic growth driven by innovation and a focus on serving as a collaborative essential partner to our customers
  • Well-respected operating companies and brand names averaging over 85 years in operation
  • Leading technology in sophisticated electromechanical power transmission, motion control and automation software solutions
  • Well positioned to capitalize on future trends including Industry 4.0
  • Established track record of prudently managing the balance sheet and providing shareholder value
  • Solid platform for future disciplined strategic acquisitions
Premier Company

1 - Pro forma revenues for the 12 months ending December 30, 2018. Figures based upon internal management estimates.

Strong Market Position Across a Diverse Set of Attractive End Markets

Altra has a long history of leveraging its well-established industry-leading brands to serve as a critical supplier to customers across a diverse set of markets.

  • Strong position at the higher end of the technology spectrum for attractive, high-growth, high-margin end markets, including medical, aerospace and defense, factory automation and robotics
  • Growing exposure to attractive secular trends
  • Decreasing exposure to more cyclical end markets

Revenue Breakdown by End-Market & Geography1

To view full charts, scroll left and right, or click here.

1 - Pro forma revenues for the 12 months ending December 30, 2018. Figures based upon internal management estimates.

Excellent Margin Profile with Significant Margin Expansion Potential

Targeting incremental 425 basis points margin improvement by 2022 through:

  • Continued implementation of established profit improvement initiatives and execution of synergies associated with the A&S merger, including:
    • Facility consolidations
    • Supply chain management
    • Strategic pricing
    • Productivity improvements from application of the Altra Business System
    • Cross-selling and access to new customers
  • Continued improvement in high profit end markets (i.e. oil & gas, mining)

Drivers of 425 bps Margin Improvement
2018 - 2022

1 - Based on continued market improvement in high profit markets (i.e. oil & gas and mining).

Strong Free Cash Flow Generation Supports Quick De-levering

  • Projecting over $1 billion of free cash flow generation during the next 5 years (FY 2019 to FY 2022)
  • Prioritizing debt pay down until leverage metrics return to historical levels of 2.0-3.0x Net Debt/EBITDA

Combined Company Net Debt / LTM Adj. EBITDA1

  1. Free cash flow generation: >$1 billion in five years
  2. Leverage the Altra Business System to reduce working capital
  3. Significant cash flow generation enables quick de-levering

1 Non-GAAP measure. Click here for a reconciliation of Audited Net Income to Non-GAAP Adjusted EBITDA

2As of December 31, 2017, Altra had $276 million of indebtedness outstanding and as of December 31, 2017 on a pro forma basis after giving effect to the Transactions, Altra would have had $1,722.4 million of indebtedness outstanding.

A Proven World-Class Business System
Driving Core Growth, Developing Outstanding Leaders, & Aligning the Organization

  • A framework to drive sustainable competitive advantage and ensure superior execution of strategic initiatives
  • Directly linked to Altra’s Core Value Drivers
  • Improves the flow of value to our Customers
  • Utilizes a robust set of tools and processes to systematically identify and eliminate waste
  • Provides our Customers with innovative solutions at the shortest lead time, highest quality and best possible value
  • Supports a work environment that stimulates and fully develops the capabilities of our employees
  • Consistent, above-market returns to our Shareholders

Strategic Priorities to Drive Shareholder Value

Altra is focused on executing against its clearly defined strategic priorities in order to capitalize on value creation.

Execute A&S Integration

Deliver 425 bps margin improvement

Expediently De-lever

Drive Top-line Organic Growth

Flawlessly execute the A&S integration

  • Seamlessly separate the A&S operating companies from Fortive and integrate into Altra’s structure
  • Quickly transition from tactical integration activities to focus on capturing value
  • Identify and leverage combined best practices
  • Build extraordinary teams that deliver extraordinary results

Deliver 425 basis points of margin improvement by 2022

  • Continue to deploy established profit improvement initiatives
  • Execute on synergies associated with the A&S merger
  • Capitalize on improving conditions in high profit end markets

Leverage strong Free Cash Flow generation to expediently de-lever and strengthen the balance sheet

  • Prioritize debt pay down until leverage metrics return to historical levels of 2.0-3.0x Net Debt/EBITDA

Create an environment conducive to top-line organic growth

  • Effectively deploy business system tools to support continuous improvement in leadership, growth and lean
  • Capitalize on technology sharing to accelerate innovation
  • Strategically infuse capital into the operating companies to support growth and business improvements