CHARLOTTE, N.C. – SPX Technologies (NYSE:SPXC) has announced a definitive agreement to acquire Kranze Technology Solutions, Inc. (KTS), a company recognized for its expertise in digital interoperability and tactical networking solutions. This acquisition is set to expand SPX’s Communication Technologies (CommTech) platform within its Detection & Measurement segment.
KTS, based in Des Plaines, Illinois, is known for its advanced solutions that enhance situational awareness and tactical execution by integrating and distributing real-time information across various communication domains. The company has established a strong customer base, notably with the US Marine Corps.
The cash transaction, valued at approximately $350 million, is expected to close in the first quarter of 2025, pending regulatory approval under the Hart-Scott-Rodino Act. KTS is projected to generate revenue of about $90 million for the full year 2025, with income margins and growth rates slightly above the average of the Detection & Measurement segment.
SPX Technologies plans to fund the acquisition through its revolving credit facility and anticipates the purchase to be modestly accretive to its adjusted earnings per share in 2025, after accounting for the interest cost of financing.
Gene Lowe, President and CEO of SPX Technologies, expressed enthusiasm about the acquisition, highlighting KTS’s complementary capabilities to SPX’s existing tactical datalinks and radio frequency (RF) countermeasure offerings. Lowe pointed out that the acquisition aligns with the company’s strategy of building market-leading platforms, marking their 15th acquisition since 2018.
Dr. Richard Kranze, Founder and CEO of KTS, also commented on the merger, stating that the union of KTS with SPX’s CommTech platform would offer numerous opportunities for growth and value creation.
The acquisition is expected to scale SPX’s CommTech platform to over $200 million in revenue and provide a solid foundation for expansion in closely related markets.
This report is based on a press release statement from SPX Technologies. Despite recent market volatility causing an 8.2% decline in the stock price over the past week, InvestingPro maintains a comprehensive analysis of SPX Technologies, with additional ProTips and detailed metrics available to subscribers. For deeper insights into SPX’s valuation and growth prospects, access the full Pro Research Report, part of InvestingPro’s coverage of over 1,400 US equities.
In other recent news, SPX Technologies reported strong Q3 growth, primarily driven by its HVAC cooling segment. The company announced a 7.8% increase in revenue, along with significant rises in both adjusted EBITDA and EPS. This growth was attributed to robust market demand and strategic acquisitions. Additionally, SPX Technologies managed to reduce its carbon intensity by 30% ahead of schedule, with ongoing investments in efficiency improvements.
Despite a slower start to the heating season, the company is maintaining a positive outlook, supported by a considerable project backlog and favorable market conditions. In particular, SPX Technologies has a solid backlog of $438 million in HVAC and $193 million in Detection & Measurement, providing a strong foundation for 2025.
On the other hand, the heating business experienced a slower start to the season due to weather, leading to cautious inventory management by distributors. The company also noted modest growth in the Detection & Measurement segment, with softer performance in China and Continental Europe. However, SPX Technologies remains confident in its M&A pipeline, with potential deals and an expanded $1 billion credit facility.
The company expects to see a full-year adjusted EBITDA growth of about 35% and adjusted EPS growth of 28%. Meanwhile, the leverage ratio is projected to decline to 1.2x by the end of the year. These are the recent developments in SPX Technologies.
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