SPX Corporation (NYSE: SPXC) disclosed that it has inked an agreement to divest its SPX transformer solutions. SPX is going to sell 100% of the issued and outstanding stock of its fully-owned unit, SPX Transformer Solutions, Inc., to GE-Prolec Transformers, Inc. for a cash buying price of $645 million.
GE-Prolec Transformers, Inc. is a unit of a joint venture between GE (NYSE: GE) and Xignux S.A. de C.V. This divesting agreement is greater than SPX in SPX’s value creation journey that further centered its strategy on growth in its HVAC and Detection & Measurement segments. The firm has disclosed that it will speed up its strategic projects by leveraging its capital and management resources on these technology-focused, high-margin, niche platforms. SPX can further steer the substantial value for shareholders. It will also generate additional opportunities for employees and clients.
Furthermore, SPX expects that after taxes on a gain from the sale, net profit will be nearly $540 million. The buying price is dependent on customary net working capital and similar adjustments at execution. The deal is expected to execute during the second half of 2021, dependent on the fulfillment of typical execution conditions, including antitrust regulatory review. The exclusive financial adviser of SPX Corporation was J.P. Morgan Securities LLC, and its legal adviser was K&L Gates LLP.
In addition to this, Ricardo Suarez, CEO of Prolec GE stated that this deal will create value for all of its stakeholders. Prolec GE’s vision is to be acknowledged as the most trusted and strategic partner to its clients for innovative and environmentally-friendly energy solutions.