SPX Corp. controls the ebb and flow of multiple industries. The company operates from four units: Flow Technology (pumps, valves, other fluid handling devices); Test and Measurement (diagnostic tools, fare-collection, cable/pipe locators); Thermal Equipment and Services (cooling, heating, ventilation); and Industrial Products and Services (compactors, power systems, broadcast antenna systems, aerospace components). SPX serves core markets which include infrastructure, processing equipment, and diagnostic tools. In turn, these markets support electricity, processed foods and beverages, and vehicle services. It operates in 35-plus countries with a sales presence in 150 countries.
SPX saw its revenue levels spike by almost 12% in 2011, rising from $4.9 billion to almost $5.5 billion. However, its profits slipped 12%, from $205 million to $180 million. While its Flow Technology and Test and Measurement segments saw organic revenue and net income growth, the positive momentum was partially offset by minimal organic growth and income declines across its Thermal Equipment and Services and Industrial Products and Services segments. Specifically, in 2011 the company was hurt by a decline in net sales for its dry cooling products in China.
Of the SPX revenues derived from non-US markets, 28% are generated from developing countries. The company forecasts that this trend will continue and expects to see single digit increases in the majority of its segments, except for Flow Technology, SPX's largest segment, where it sees revenues increasing by as much as 15% as a result of an increase in demand for food and beverage products.
Acquisitions and divestments are a large part of SPX's growth strategy. The company primarily looks to buy bolt-on businesses that adhere to its existing activities, in markets with sustained growth opportunities.
In 2011 Flow Technology further extended its geographic and industry reach through the acquisition of CLYDEUNION Pumps, a manufacturer of pump technologies for the oil and gas and power generation sectors. It paid about $785 million for UK-based CLYDEUNION Pumps, which has plants in Brazil, Canada, France, India, Indonesia, and the US. The previous year, the segment bolstered its products used in the food industry after acquiring Anhydro, which made equipment used in dairy, food, and pharmaceutical applications; and B.W. Murdoch, an engineering company that served the food and beverage sectors.
In early 2011 SPX bought the Automotive Diagnostic Solutions unit of Teradyne. The UK-based unit, which catered to transportation equipment makers, supported SPX's position in the automotive test market. The addition broadened both SPX Test and Measurement's technological capacity and customer base in an industry that is finally showing signs of a gradual recovery. SPX's Test and Measurement segment partners with the manufacturers of automobiles, recreational vehicles, and agricultural/construction equipment to provide electronic diagnostic systems, specialty service tools, and technical information services.
In a move to focus on its better performing segments, the company in 2012 sold its Service Solutions business, which manufactured auto tools, to Robert Bosch GmbH for some $1.15 billion in cash. SPX expected to recognize a net gain of $450 million as a result of the transaction. – less