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AQUISITIONS AND DISCONTINUED OPERATIONS | 3 Months Ended
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Mar. 29, 2025
Acquisitions and Discontinued Operations [Abstract] |
AQUISITIONS AND DISCONTINUED OPERATIONS | ACQUISITIONS AND DISCONTINUED OPERATIONS Acquisitions From time to time, we may make acquisitions that do not significantly impact our financial position or statements of operations. These acquisitions primarily complement our existing business operations or strategic initiatives with no significant impact to our financial outlook and end markets, nor requiring a significant investment of resources. Such acquisitions are not separately identified within this report on Form 10-Q. During the three months ended March 29, 2025, cash outflows, net of cash acquired, related to this activity totaled $8.2. The post-acquisition operating results are reflected within our HVAC reportable segment and have no significant impact to our financial outlook and end markets. Acquisition of KTS As indicated in Note 1, on January 27, 2025, we completed the acquisition of KTS for net cash consideration of $342.4, inclusive of amounts paid related to future service obligations of certain employees of $46.5 described further below. We financed the acquisition with available borrowings on our revolving credit facilities under our senior credit facilities. In connection with the acquisition of KTS, and as required by the acquisition agreement, we assumed employee retention agreements with certain employees, totaling $46.5, that include future service obligations. In the event employees forfeit any amounts under the terms of the agreements, such amounts are due to the seller of KTS. We funded the amounts related to these retention agreements through a reduction in the purchase price, with $46.5 paid in an escrow account at the time of the acquisition closing, as required by the acquisition agreement. The deferred compensation assets related to these agreements will be amortized over the agreement terms which range from 2 to 8 years. During the three months ended March 29, 2025, we recognized compensation costs of $4.3, which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations, related to such retention agreements. The remaining deferred compensation assets of $23.5 and $18.7 are recorded within “Other current assets” and “Other assets” within our condensed consolidated balance sheet as of March 29, 2025, respectively. The following is a summary of the recorded preliminary fair values of the assets acquired and liabilities assumed for KTS as of January 27, 2025:
Assets acquired: |  |
Current assets(1) |  | $ | 66.3 |
Property, plant and equipment |  | 5.5 |
Goodwill |  | 105.0 |
Intangible assets |  | 164.5 |
Other assets(1) |  | 21.2 |
Total assets acquired |  | 362.5 |
Current liabilities assumed |  | 15.4 |
Other long-term liabilities |  | 4.7 |
Net assets acquired |  | $ | 342.4 |
___________________________ (1)Includes $26.2 and $20.3 within “Current assets” and “Other assets”, respectively, for deferred compensation assets related to the employee retention agreements discussed previously. The identifiable intangible assets acquired consis t of technology, customer relationships and contracts, trademarks, and customer backlog of $79.8, $70.7, $6.7, and $7.3, respectively, with suc h amounts based on an assessment of the related fair values. We expect to amortize the technology, customer relationships and contracts, trademarks, and customer backlog assets ove r 12.0, 15.0, 9.0, and 2.0 years, respectively. We acquired gro ss receivables of $7.2, which had the same fair value at the acquisition date based on our estimates of cash flows expected to be recovered. The qualitative factors that comprise the recorded goodwill include expected domestic and global market growth for KTS's existing operations, increased volumes achieved through product synergies with existing SPX businesses, procurement and operational savings and efficiencies, and various other factors. We expect the goodwill described above to be deductible for tax purposes. We recognized revenues and a net loss for KTS of $8.5 and $6.4, respectively, for the three months ended March 29, 2025 with the net loss impacted by charges during the three months ended March 29, 2025 of (i) $4.3 of compensation costs related to acquired retention agreements, (ii) $3.2 associated with amortization of the various intangible assets mentioned above, and (iii) $0.3 associated with the excess fair value (over historical cost) of inventory acquired which was subsequently sold. During the three months ended March 29, 2025, we incurred acquisition-related and other costs for KTS of $6.2, including the $4.3 of compensation costs related to acquired retention agreements mentioned above, which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations with $1.2 and $5.0 recorded within “Corporate expense” and “Acquisition-related and other costs”, respectively, within consolidated operating income in Note 6. Acquisition of Ingénia As indicated in Note 1, on February 7, 2024, we completed the acquisition of Ingénia, for $292.0, net of (i) an adjustment to the purchase price of $2.1 received during the third quarter of 2024 related to acquired working capital and (ii) cash acquired of $1.5. We financed the acquisition with available borrowings on our revolving credit facilities under our senior credit facilities. The excess of the purchase price over the total of the fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed is recognized as goodwill. The following is a summary of the recorded final fair values of the assets acquired and liabilities assumed for Ingénia as of February 7, 2024:
Assets acquired: |  |
Current assets, including cash and equivalents of $1.5 |  | $ | 31.2 |
Property, plant and equipment |  | 73.6 |
Goodwill |  | 142.4 |
Intangible assets |  | 97.9 |
Total assets acquired |  | 345.1 |
Current liabilities assumed |  | 14.5 |
Deferred and other income taxes |  | 37.1 |
Net assets acquired |  | $ | 293.5 |
The identifiable intangible assets acquired consis t of technology, customer relationships, trademarks, and customer backlog of $46.7, $23.5, $13.9, and $13.8, respectively, with suc h amounts based on an assessment of the related fair values. We expect to amortize the technology, customer relationships, trademarks, and customer backlog assets ove r 12.0, 7.0, 8.0, and 1.0 years, respectively. We acquired gro ss receivables of $16.1, which had the same fair value at the acquisition date based on our estimates of cash flows expected to be recovered. The qualitative factors that comprise the recorded goodwill include expected market growth for Ingénia's existing operations, increased volumes achieved by selling Ingénia’s products through existing SPX sales channels, procurement and operational savings and efficiencies, and various other factors. We expect none of the goodwill described above to be deductible for tax purposes. Additionally, during the three months ended March 29, 2025, we incurred acquisition-related and other costs for Ingénia of $0.6, which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations with $0.2 and $0.4 recorded within “Corporate expense” and “Acquisition-related and other costs”, respectively, within consolidated operating income in Note 6. The following unaudited pro forma information presents our condensed consolidated results of operations for the three months ended March 29, 2025 and March 30, 2024, respectively, as if the acquisition of KTS and Ingénia had taken place on January 1, 2024 and January 1, 2023, respectively. The unaudited pro forma financial information is not intended to represent or be indicative of our condensed consolidated results of operations that would have been reported had the acquisitions been completed as of the date presented, and should not be taken as representative of our future consolidated results of operations. The pro forma results include estimates and assumptions that management believes are reasonable; however, these results do not include any anticipated cost savings or expenses of the planned integration of KTS and Ingénia. These pro forma consolidated results of operations have been prepared for comparative purposes only and include additional interest expense on the borrowings required to finance the acquisitions, additional depreciation and amortization expense associated with fair value adjustments to the acquired property, plant and equipment and intangible assets, adjustments to reflect charges associated with acquisition-related costs and charges associated with the excess fair value (over historical cost) of inventory acquired and subsequently sold as if they were incurred beginning during the first quarter of 2024 for KTS and first quarter of 2023 for Ingénia, and the related income tax effects.
| Three months ended
| March 29, 2025 |  | March 30, 2024
Revenues | $ | 485.3 |  |  | $ | 491.6 |
Income from continuing operations | 53.9 |  |  | 39.1 |
Net income | 53.4 |  |  | 38.9 |
Income from continuing operations per share of common stock: |  |  |
Basic | $ | 1.16 |  |  | $ | 0.85 |
Diluted | $ | 1.14 |  |  | $ | 0.84 |
Net income per share of common stock: |  |  |
Basic | $ | 1.15 |  |  | $ | 0.85 |
Diluted | $ | 1.13 |  |  | $ | 0.83 |
Wind-Down of DBT Business We completed the wind-down of our DBT Technologies (PTY) LTD (“DBT”) business after ceasing all operations, including those related to two large power projects in South Africa — Kusile and Medupi, in the fourth quarter of 2021. As a result of completing the wind-down plan, we are reporting DBT as a discontinued operation for all periods presented. As previously disclosed, DBT had asserted claims against the remaining prime contractor on the large projects, Mitsubishi Heavy Industries Power — ZAF (f.k.a. Mitsubishi-Hitachi Power Systems Africa (PTY) LTD) (“MHI”), which had also asserted claims against DBT. As previously disclosed in our 2024 Annual Report on Form 10-K, on September 5, 2023, DBT and SPX entered into an agreement with MHI to resolve all claims between the parties with respect to the two large power projects in South Africa (the “Settlement Agreement”). The Settlement Agreement provides for full and final settlement and mutual release of all claims between the parties with respect to the projects, including any claim against SPX Technologies, Inc. as guarantor of DBT's performance on the projects. It also provides that the underlying subcontracts are terminated and all obligations of both parties under the subcontracts have been satisfied in full. The assets and liabilities of DBT have been included within “Assets of DBT and Heat Transfer” and “Liabilities of DBT and Heat Transfer,” respectively, on the condensed consolidated balance sheets as of March 29, 2025 and December 31, 2024. The major line items constituting DBT’s assets and liabilities as of March 29, 2025 and December 31, 2024 are shown below:
|  | March 29, 2025 |  | December 31, 2024
ASSETS |  |  |  |
Cash and equivalents |  | $ | 4.3 |  |  | $ | 4.4 |
Other current assets(1) |  | 3.4 |  |  | 3.4 |
Total assets of DBT |  | $ | 7.7 |  |  | $ | 7.8 |
LIABILITIES |  |  |  |
Accounts payable(1) |  | $ | 0.7 |  |  | $ | 0.7 |
Contract liabilities(1) |  | 2.1 |  |  | 2.0 |
Accrued expenses(1) |  | 6.1 |  |  | 5.8 |
Other long-term liabilities(1) |  | 4.3 |  |  | 4.2 |
Total liabilities of DBT |  | $ | 13.2 |  |  | $ | 12.7 |
___________________________ (1)Balances relate primarily to disputed amounts due to or from a subcontractor, engaged by DBT during the Kusile project, that is currently in liquidation. The timing of the ultimate resolution of these matters is uncertain as they are likely to occur as part of the liquidation process. Wind-Down of the Heat Transfer Business We completed the wind-down of our SPX Heat Transfer (“Heat Transfer”) business in the fourth quarter of 2020. As a result of completing the wind-down plan, we are reporting Heat Transfer as a discontinued operation for all periods presented. The assets and liabilities of Heat Transfer have been included within “Assets of DBT and Heat Transfer” and “Liabilities of DBT and Heat Transfer,” respectively, on the condensed consolidated balance sheets as of March 29, 2025 and December 31, 2024. The major line items constituting Heat Transfer’s assets and liabilities as of March 29, 2025 and December 31, 2024 are shown below:
|  | March 29, 2025 |  | December 31, 2024
ASSETS |  |  |  |
Cash and equivalents |  | $ | 0.1 |  |  | $ | 0.1 |
Other current assets |  | 0.3 |  |  | 0.3 |
Total assets of Heat Transfer |  | $ | 0.4 |  |  | $ | 0.4 |
LIABILITIES |  |  |  |
Accounts payable |  | $ | — |  |  | $ | 0.1 |
Total liabilities of Heat Transfer |  | $ | — |  |  | $ | 0.1 |
Changes in estimates associated with liabilities retained in connection with a business divestiture (e.g. income taxes) may occur. As a result, it is possible that the resulting gains/losses on these and other previous divestitures may be materially adjusted in subsequent periods. For the three months ended March 29, 2025 and March 30, 2024, results of operations from our businesses reported as discontinued operations were as follows:
| Three months ended
| March 29, 2025 |  | March 30, 2024
Loss from discontinued operations(1) | $ | (0.5) |  |  | $ | (0.4) |
Income tax benefit | — |  |  | 0.2 |
Loss from discontinued operations, net | $ | (0.5) |  |  | $ | (0.2) |
___________________________ (1)Loss for the three months ended March 29, 2025 and March 30, 2024 related primarily to costs incurred to support DBT through the subcontractor liquidation process mentioned above.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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