SPX CORPORATION (NYSE:SPXC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
an agreement to sell SPXs Balcke-Drr businesses, a group within
SPXs Power Reportable Segment (Balcke-Drr), to a subsidiary of
mutares AG (the Transaction). Mutares AG is a German-based
publically traded industrial holding company.
Agreement), by and among SPX Cooling Technologies Leipzig GmbH, a
company organized in Germany, Marley Cooling Tower (Holdings)
Limited, a company organized in the United Kingdom, and SPX
Mauritius Ltd., a company organized in Mauritius (collectively,
the Sellers, and each a Seller), and mutares Holding-24 AG, a
company organized in Germany (Purchaser), and, as parent
guarantor, mutares AG, a company organized in Germany (mutares),
the Sellers will transfer the equity interests of the various
subsidiaries comprising Balcke-Drr to Purchaser on a debt-free
basis in exchange for nominal cash at closing. In addition,
Sellers committed to providing a non-interest bearing loan of 8.8
million to Purchaser, payable in installments due at years end
2018 and 2019, and to leaving approximately 20 million of cash
and sufficient working capital (subject to a working capital
adjustment) within Balcke-Drr to support ongoing operations and
implementation of the Purchasers strategic plan. Finally, the
parties agreed to an earn-out arrangement whereby Purchaser will
pay a percentage of free cash flow of Balcke-Drr, up to 5
million, beginning in 2020.
expected to close before the end of the year, are conditioned
only upon satisfaction of German competition filing requirements
and customary closing deliverables.
guarantees, bank guarantees, and surety bonds (customary for the
Balcke-Drr business) will remain in place through each such
instruments expiration. Purchaser has agreed to provide an
indemnity from Balcke-Drr in the event that any of these existing
guarantees or bonds are called. In the event that Balcke-Drr is
unable to meet these obligations, Purchaser and mutares will
provide cash collateral and a parent company guarantee which
provide SPX with security against a portion of these indemnity
obligations. In addition, the Purchase Agreement provides certain
assurances from Purchaser and mutares around the continued
operation and funding of Balcke-Drr after closing.
representations, warranties, and covenants and Purchaser has an
option to purchase representation and warranty insurance
coverage. If insurance is not available, then Sellers shall only
be liable to the extent any breaches of the representations and
warranties are the result of fraud or intentional misconduct. In
addition, Sellers are providing limited specific indemnities to
address potential customer claims with respect to certain
projects.
party fails to satisfy its obligations at closing. In the event
of such termination, the breaching party will be required to pay
a break-up fee of 2.5 million.
Transaction of $60-$70 million.
material effect on our leverage or liquidity in 2016, and we
anticipate a positive effect on our leverage and liquidity on a
prospective basis.
portions of our Power Generation business would have the effect
of increasing the Companys current Adjusted EPS guidance for 2016
by more than $0.30, the majority of which is attributable to the
sale of Balcke-Drr. Adjusted EPS is calculated in a manner
consistent with the presentation of Adjusted EPS in SPXs press
release dated November 3, 2016 and submitted as Exhibit 99.1 to
SPXs Current Report on Form 8-K dated November 3, 2016. Because
of the forward-looking nature of the estimate of Adjusted EPS, it
is impractical to present a quantitative reconciliation of such
measure to a comparable GAAP measure, and accordingly no such
GAAP measure or reconciliation is being presented.
Transaction and entry into the Purchase Agreement is included as
Exhibit 99.1 hereto and is incorporated by reference.
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Exhibit Number
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Description
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99.1
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Press Release of SPX Corporation, dated November 23,
2016 |
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About SPX CORPORATION (NYSE:SPXC)
SPX Corporation is a diversified, global supplier of infrastructure equipment. The Company operates through three segments: heating, ventilation and air conditioning (HVAC); Detection and Measurement, and Power. The HVAC solutions offered by its businesses include package cooling towers, residential and commercial boilers, heating and ventilation products. Its detection and measurement product lines encompass underground pipe and cable locators, and inspection equipment. Within its power platform, it is a manufacturer of medium and large power transformers, as well as equipment for various types of power plant, including cooling equipment, heat exchangers and pollution control systems. Its heating and ventilation products are sold under the Berko, Qmark, Farenheat, and Leading Edge brands, while its Marley-Wylain subsidiary sells Weil-McLain and Williamson-Thermoflo brands. Its power products are sold under the brand names of SPX Cooling, Marley, Balcke Duerr, Yuba and Ecolaire. SPX CORPORATION (NYSE:SPXC) Recent Trading Information
SPX CORPORATION (NYSE:SPXC) closed its last trading session up +0.46 at 24.07 with 358,231 shares trading hands.
