SPX Corporation announced that it has entered into a definitive agreement to sell its Service Solutions business to Robert Bosch GmbH for $1.15 billion in cash.

This sale is subject to normal closing conditions, regulatory and other approvals and is expected to be completed in the first half of 2012. Upon completion, SPX expects to record an after-tax book gain of approximately $450 million dollars or $8.65 per share.

"The sale of Service Solutions represents the latest significant development in the transformation of SPX," said Chris Kearney, SPX Chairman, President and CEO. "This divestiture narrows our strategic focus and enhances our ability to build out our Flow Technology segment. Flow Technology is the foundation of our company and we now expect that segment to represent more than 50 percent of our revenue going forward."

Kearney also said, "We anticipate after-tax proceeds of approximately $1 billion which will significantly increase our liquidity and financial flexibility. With respect to capital allocation, we plan to commit approximately $350 million to debt reduction, including the funding of our 2013 debt maturities, and de-lever into our target gross leverage range of 1.5 to 2.5 times during 2012. We also intend to enter into a plan, subject to the terms of our credit agreements, to repurchase a minimum of $350 million of equity.  After these actions, we expect to have approximately $1.5 billion of liquidity in 2012 and will evaluate additional strategic acquisitions and/or share repurchases consistent with our capital allocation methodology."

David Kowalski, SPX segment president said, "We are proud that we transformed Service Solutions from a domestic hard tool manufacturer into a global supplier of diagnostic solutions, hard tools and repair information services. Bosch is dedicated to the automotive service sector and has strong relationships with vehicle original equipment manufacturers worldwide. We believe Service Solutions is a very good strategic fit with Bosch."

Credit Suisse Securities (USA) LLC acted as a financial advisor to SPX on the Service Solutions transaction.

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