SPX Technologies doubles credit facility to $1 Billion

SPX Technologies, Inc. (NYSE:SPXC), a company specializing in metalworking machinery and equipment, announced on Monday an amendment to its credit agreement that effectively doubles its revolving credit commitments from $500 million to $1 billion.

The Charlotte, North Carolina-based company, through its wholly-owned subsidiary SPX Enterprises, LLC, entered into the agreement with Bank of America, N.A., acting as the administrative agent, and other lenders.

The amendment, made effective as of August 30, 2024, includes certain conforming changes and additional amendments to the existing credit agreement, which was originally established on August 12, 2022. The expanded credit facility is expected to support SPX Technologies' plans for permitted acquisitions, cover related fees, costs, and other corporate purposes.

This financial move provides SPX Technologies with increased financial flexibility, as the company aims to leverage the additional capital for strategic growth initiatives. The terms of the amendment stipulate that the increased credit capacity will be used in accordance with corporate regulations, ensuring lawful allocation of the funds.

SPX Technologies has a history of name changes, previously known as SPX Corp (NYSE:SPXC) and before that, Sealed Power Corp. The company's fiscal year ends on December 31, and it is incorporated in Delaware. The additional financial resources from the amendment come at a time when the company is potentially looking to expand its market reach and capabilities through acquisitions.

In other recent news, SPX Technologies reported strong financial results for the second quarter of 2024, leading to an upward revision of its full-year guidance. The company saw an 18.4% increase in revenue and a 45% rise in adjusted EBITDA year-on-year.

This performance was driven by successful integration of recent acquisitions and strong performance across all segments. The company also raised its full-year guidance, projecting a 35% growth in adjusted EBITDA and a 28% growth in adjusted EPS.

In terms of operations, SPX Technologies reported margin expansion by 400 basis points, with the HVAC segment experiencing a 300 basis point expansion. The company credited successful new product launches and cross-selling opportunities for this growth. Furthermore, SPX Technologies has a healthy pipeline of M&A opportunities and is on track to reduce net leverage.

However, the company also reported some delays in industrial tech projects, including an EV or battery plant. Despite this, SPX Technologies is optimistic about the second half of the year, with a strategic approach to acquisitions and capital deployment exceeding $800 million. The company anticipates being below its target leverage ratio by the end of the year.

InvestingPro Insights

In light of SPX Technologies, Inc.'s (NYSE:SPXC) recent amendment to its credit agreement, key financial metrics and market performance provide additional context for investors. According to real-time data from InvestingPro, SPX Technologies boasts a robust revenue growth rate of 16.13% over the last twelve months as of Q2 2024, indicating a solid expansion in its business operations. The company is trading at a high earnings multiple, with a P/E ratio of 65.42, which suggests investor confidence in its future earnings potential.

InvestingPro Tips highlight that analysts have recently revised their earnings upwards for the upcoming period, signaling optimism about the company's financial prospects. Additionally, SPX Technologies has been recognized for its high return over the last year, with a 103.98% price total return, reflecting strong market performance and investor sentiment. For those interested in deeper analysis, there are 15 additional InvestingPro Tips available, offering a comprehensive look at SPX Technologies' financial health and market position.

With a market cap of $6.87 billion USD and a Price / Book ratio of 5.34 as of the last twelve months, the company’s valuation reflects a balance between its book value and market valuation. These insights from InvestingPro, coupled with the company's strategic financial maneuver to double its revolving credit commitments, may guide investors in assessing SPX Technologies' growth trajectory and investment potential.

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