WATCH PRICE TARGET - SPX Corp SPW 7.625% 12/15/2014

download SPX Corp Credit Snapshot

SPX Corp. is a diversified industrial company with its global operations organized into four
segments:

• Flow Technology
• Test and Measurement
• Thermal Equipment and Services
• Industrial Products and Services.

SPX's markets include Food and Beverage, Power and Energy, Process Industries,
Heating, Ventilating and Air Conditioning, General Industrial, and Transportation.
As a global multi-industry manufacturer they have operations in more than 40
countries and make revenues in more than 150 countries and focus on the
global infrastructure development market, which accounts for approximately
half of the company's revenues.

2008 revenues by segments:

The company is a leading provider of transformers, cooling towers, heat exchangers and
other industrial hardware for power and other infrastructure projects.

Geographical split of 2008 revenues and LT-assets

SPX's markets are cyclical and were negatively impacted by the global
economic slowdown
(f.i. the tools and diagnostics business is week
because its dependence on the Auto sector)
with industrial segment backlog down 44% from its peak.

The 4% Sequential Increase in Backlog in Q2 09 was driven by foreign currency fluctuations
and dry cooling contracts in China.

Longer term business
perspectives are dependent on energy demand and energy
infrastructure
investment and SPX may benefit from its global diversification. However,
management is not optimistic that SPX will benefit from US stiumulus since investments
are mostly directed towards alternative energy. 

The company historically operates at a relatively low leverage multiple.

The company does pay dividends in a USD 52 to 73MM annual range.

...and engages in stock repurchases (113MM in Q1 09)

SPX does acquisitions frequently with the most significant recent deal being APV PLC, UK which
was acquired in December 07 for GBP 250MM and contributed about USD 800MM in revenues.

However, company management made a capital allocation commitment on July, 29th 2009
(its most recent Q presenation) to stay away from stock repurchases or acquisitions and to
reduce debt until they have reached a leverage multiple of 2x.

link to Q2 2009 presentations

Free cash flow guidance for 2009 is in the USD 230 to 270MM range (working capital improvements on
lower revenue outlook and lower cash taxes).

In the following are some links to most recent SPX Corp research notes. You
will need your own log-in and password to read it. If you don't have one don't
be depressed since the notes in general are not terribly informative.

GS

JPM

Barclays

Boa I

Boa II