SPX Technologies Closes ASPEQ Buyout, Boosts 2023 Guidance

SPX Technologies Inc SPXC disclosed completing the acquisition of ASPEQ Heating Group for $418 million in cash.
Post completion, ASPEQ became a part of SPX Technologies' HVAC Heating platform within its electrical heating business.
Management expects ASPEQ to witness annual revenue of about $120 million, with higher-than-company-average sales growth and margins.
2023 Guidance Raised: The company increased the adjusted EPS outlook to $3.90-$4.05 (+28% Y/Y) from $3.80-$3.95 earlier, vs consensus of $3.90.
SPXC now projects revenue of $1.68 billion-$1.72 billion (vs. $1.61 billion-$1.65 billion prior and consensus: $1.62 billion) and an adjusted operating income margin of 15.00%- 15.75% (vs. 14.50%-15.25% earlier).
The higher guidance reflects a partial year of ownership of ASPEQ and the impact of financing costs related to the transaction.
Gene Lowe, President and CEO, stated, "This transaction more than doubles SPX Technologies' position in electrical heating and expands our value-creation opportunities in highly complementary and attractive industrial and commercial end markets. We see significant long-term growth potential for our combined businesses, as well as nearer-term benefits from favorable secular trends such as electrification, decarbonization, and reshoring."
Last month, the company reported Q1 2023 revenues of $399.8 million, beating the consensus of $331.0 million and adjusted EPS of $0.93, exceeding the consensus of $0.60.
SPXC held $212.7 million in cash and cash equivalents as of Apr 1, 2023.
Price Action: SPXC shares are trading lower by 1.02% at $81.26 premarket on the last check Monday.

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