SPX To Sell JV Interest In EGS Electric Group To Emerson Electric For $571 Mln

(RTTNews) - SPX Corp. (SPW) announced that it has entered into a definitive agreement to sell its 44.5% joint venture interest in EGS Electric Group LLC to Emerson Electric Co. (EMR) for $571 million. The sale is expected to close in the first quarter of 2014.

As a result of this sale, SPX expects to record an after-tax gain of about $300 million, or $6.50 per share, in its first quarter results. It also expects to pay cash taxes on the transaction of about $220 million, bringing the net, after-tax proceeds to approximately $350 million.

In addition, SPX said it plans to allocate $500 million to share repurchases; this includes the $55 million of share repurchases remaining from the company's previously announced target. To facilitate these repurchases, the company plans to enter into a 10b5-1 stock repurchase agreement that is expected to begin trading in the fourth quarter and complete by the end of 2014.

SPX also plans to reduce its gross debt by $300 million. As part of this initiative, upon closing of the sale of the company's interest in EGS, the company expects to tender for its $500 million of senior unsecured notes that mature in December 2014. It also expects to amend its existing credit facility agreement to extend the maturity to 2018 and increase the size of its Term Loan A by $100 million, funding a portion of the bond repurchase.