Bank of America Reports SPX Selling its Service Solutions Business to Bosch

According to a research report published today, Bank of America believes SPX Corporation's

choice to sell its Service Solutions business is a strategic home run. “The timing appears optimal (mid-way through cycle recovery). The sale multiple appears highly favorable – the 12.7x compares to 5.9x North American automotive suppliers (per BofAML U.S. Automotive research team). The embedded value of an automotive business likely did not help SPW's overall valuation. SPX will be able to pay down $350mm of debt bringing gross leverage to the target range of 1.5-2.5x during 2012. The deal provides the company fire power to repurchase at least $350mm of its equity (roughly 10% of the current market cap),” Bank of America stated in the report. Bank of America maintains its Buy rating and $80.00 PT on SPX Corp., which closed yesterday at $66.42.