The Joplin Globe, Joplin, MO

Business

December 4, 2013

SPX selling stake in EGS Electric for $571 million

CHARLOTTE, N.C. — SPX is selling its minority interest in the joint venture EGS Electric Group LLC to its partner Emerson Electric Co. for $571 million.

SPX Chairman, President and CEO Chris Kearney said in a statement Wednesday that the sale of the 44.5 percent joint venture stake “is consistent with our strategy to narrow our focus” on products to manage flows.

It makes flow components for oil and gas processing as well as processing systems for the food and beverage industry, power transformers for utility companies and cooling systems for power plants.

SPX Corp., based in Charlotte, N.C., expects an after-tax gain of about $300 million, or $6.50 per share, from the sale of the joint venture stake. The gain will be recorded with its first-quarter results. Proceeds are expected to be about $350 million, after taxes.

EGS manufactures electrical fittings, hazardous location lighting and other products.

Emerson, based in St. Louis, has owned the joint venture with SPX since 1997 and has been responsible for operational management.

SPX’s Kearney said that proceeds from the sale, combined with available cash and planned divestitures of discontinued operations, are expected to be used for $500 million in stock buybacks and to lower its gross debt by about $300 million.

SPX shares rose 93 cents to $93.97 in morning trading Wednesday. Emerson Electric shares slipped 29 cents to $66.41.

 

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