SPX To Buy United Dominion
MUSKEGON, Mich. (AP) _ SPX Corp., a supplier of auto parts and services to automakers, plans to buy United Dominion Industries Ltd. for $954 million.
As part of the deal, Muskegon-based SPX will also assume or refinance United Dominion’s $876 million of debt, the companies said Monday.
``This is a superb acquisition which broadens and strengthens SPX’s portfolio of industrial and technical businesses and provides us with enhanced value-creation opportunities,″ said SPX chairman, president and chief executive John B. Blystone.
Under the deal, United Dominion shareholders will get 0.2353 of an SPX share for each United Dominion share, worth about $25 based on the average closing price of SPX common stock for the five-day period ended last Friday, the companies said.
Based on the same five-day period, the purchase price represents a roughly 30 percent premium for shareholders of the Charlotte, N.C.-based United Dominion, which makes various engineered machinery, instruments and other products.
Shares of the Muskegon-based SPX were down $6.90, or 7 percent, to $96.70, while shares of United Dominion were up $2.61 to $22.11, both on the New York Stock Exchange.
Both companies’ boards unanimously have signed off on the deal, which still needs federal regulatory and shareholder approval. The companies expect the deal to be completed by the summer.
SPX expects the deal to be accretive to its earnings per share in the first full year and to produce significant incremental cash flow, based on achieving cost savings of at least $30 million in the first full year.
SPX said it will use cash on hand and a new $780 million bank credit facility underwritten by investment firm J.P. Morgan to refinance United Dominion’s debt.
If the deal is terminated for certain circumstances, United Dominion will be required to pay SPX a $40 million breakup fee.
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