SPX FLOW Narrows Strategy on Growing Its Premier Process Solutions Enterprise
- Focusing Strategy on Process Solutions
$1.6 billionin annual revenue business comprising current Food and Beverage and Industrial reportable segments and Bran+Luebbe metering pump product line
- Leverage deep application knowledge, technical engineering and process expertise to expand customer base
- Concentrate sales in high quality process applications with recurring revenue streams
- Increase focus on serving attractive growth markets driven by mega trends
- Reduce cyclicality and de-risk portfolio by decreasing exposure to energy markets
- Create a more attractive organic growth, gross margin and ROIC profile
- Tailoring Organizational Design to Deliver World-Class Customer Experience
Dwight Gibsonto lead one combined commercial team
- Leveraging "Pathway to Excellence" lean approach to increase speed, efficiency of customer fulfillment
- Increasing focus on innovative customer and market analytics to drive growth and new product development
- Positioning for High Quality Revenue Growth and ROIC Expansion
- Targeting mid-teens EBITDA margin and double-digit ROIC after elimination of stranded costs, lower corporate overhead and streamlined functional support
- Increasing focus on talent development, organic growth investments and disciplined acquisition growth
- Creating ample liquidity and flexibility to execute disciplined, ROIC-centered capital allocation
- Divestiture proceeds to target organic investments, further deleveraging and returns to shareholders
- Initiating Divestiture of Power and Energy Business
~$500 millionin annual revenue
- Leading supplier of highly engineered, mission critical flow control pumps, valves and filtration technology
- José Larios to lead experienced management team with an average of 20+ years in the energy sector
"Over the past few years we have made great progress on our journey to transform
Michael continued, "Our Power and Energy business has more than 100 years of experience serving customers in energy and power markets and is well-recognized as a leading supplier of mission critical pumps, valves and filtration technology. However, we believe the business profile and end market exposure does not fit with our process solutions strategy. We are confident that pursuing a sale of Power and Energy is the best path to maximizing value for
"By divesting Power and Energy, we will reduce our exposure to cyclical energy markets and devote our full attention on building a premier process solutions enterprise with high quality, recurring revenue streams, mid-teens EBITDA margins and double-digit return on invested capital. This includes 2%-3% of margin expansion we expect to deliver by addressing stranded costs, reducing corporate overhead and streamlining functional support. We also intend to strengthen our balance sheet and provide ample financial flexibility to invest for growth and create value through disciplined, ROIC-centered capital allocation going forward."
"As we execute this strategic transformation, we remain committed to fully supporting all customers and delivering on our operational improvement objectives. We thank our employees for their contributions and dedication as we work hard to position our enterprise for sustainable, long-term success," concluded Michael.
Creating a Premier Process Solutions Enterprise
Process Solutions has annual revenue of approximately
Notable brands include APV,
Gibson said, "Process expertise and technical engineering capability is at the core of our value proposition for customers in complex, highly regulated applications. In these applications, our process technology and components are integral to the specific product being created through our customers' processes. This provides us great customer intimacy and positions us to be a lifecycle service partner to customers, working with them to maximize operating efficiency and up-time, while also meeting regulatory, sustainability and cost of ownership objectives."
Gibson continued, "To further develop these differentiating skill sets, we will focus on talent development, deeper customer intimacy and speed of delivery to customers. We will focus growth investments on strengthening our core process solutions offerings and expanding into attractive adjacencies."
Divesting the Power and Energy Business
The Power and Energy business is a global leader in mission critical severe duty pumps, valves, filtration products and aftermarket parts and services for energy and power customers. José Larios, President of the business, leads a strong management team with an average of more than 20 years of experience in the flow control and energy sector. The products included in the divesture process are well recognized by the brand names: M&J Valve, ClydeUnion Pumps, S&N Pumps, Copes-Vulcan, Dollinger, Plenty, Airpel, and GD Engineering.
The SPX FLOW Board, with the assistance of independent financial and legal advisors, has initiated a process to divest the Company's Power and Energy business, which has annual revenue of approximately
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Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. The words "expect," "plan," "will," "believe" and similar expressions identify forward-looking statements. These statements are only predictions. Actual events or results may differ materially because of market conditions or other factors, and forward-looking statements should not be relied upon as a prediction of actual results. These forward-looking statements are subject to numerous risks and uncertainties, including with respect to the timing and terms of any disposition and the identification, and successful completion and integration, of attractive growth investments. All the forward-looking statements in this press release are further qualified in their entirety by reference to the factors discussed under the heading "Risk Factors" in