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Baldor Electric Company Announces Acquisition of Energy Dynamics, Inc.

Fort Smith, Arkansas – Baldor Electric Company (NYSE:BEZ) markets, designs, and manufactures electric motors, drives, and generators and is based in Fort Smith, Arkansas. Today Baldor announced that it has reached an agreement to purchase Energy Dynamics, Inc. in Mukwonago, Wisconsin. Energy Dynamics, Inc. (hereafter referred to as EDI) is a designer, assembler, and marketer of industrial generator sets.

Founded in 1984 and privately owned, EDI had annual sales of $8 million in 2002. The 45,000 sq. ft. facility is located in Mukwonago, Wisconsin, a suburb of Milwaukee. EDI designs, assembles, and markets a variety of industrial generators for standby, prime power, and peak-shaving applications, ranging in size from 15 – 2000 kW.

Markets served by EDI include telecommunications, mining, municipal, and industrial standby. EDI’s customers include Verizon, Ameritech, NYNEX, and Bell South, as well as international customers such as Escondida Copper Mine and San Cristobal Gold Mine both located in Chile and MRP Transportation located in Taiwan.

“The addition of EDI expands Baldor’s offering of generators, which began with our acquisition of Pow’r Gard Generator Corporation in October of 2000.” according to John McFarland, Baldor’s President and CEO. “While Pow’r Gard focused on generators from 1.3 to 200 kW, EDI’s strength is in the 200 to 2000 kW range. Now, Baldor offers a complete line of portable, standby, and prime power generators from 1.3 to 2000 kW, providing us even greater opportunities to participate in the multi-billion dollar generator market.”

Al Larson, EDI’s President, commented, “We are excited to become part of Baldor. Combining Baldor’s large sales organization, strength in generators up to 200 kW, and reputation for quality and customer service, with the broad product capabilities of EDI above 200 kW, positions Baldor for greater success in the generator market.”

The importance of uninterrupted power continues to be critical as many companies expand cellular communication and internet-based business information systems. Standby generators provide protection from electric power outages. In addition, many industrial companies are beginning to realize the benefits of installing peak-shaving generators, reducing their electricity consumption during peak demand, and avoiding the high peak demand rates charged by many electric utilities.

“The acquisition of EDI helps to complete our generator product line, providing customers a broad range of high quality industrial generators,” added R. S. Boreham, Jr., Baldor’s Chairman.

The purchase of EDI will be accretive to Baldor’s earnings in 2003. No other financial terms were disclosed. Baldor Electric Company is a leading manufacturer of high efficiency motors, drives, and generators, and is based in Fort Smith, Arkansas.