Emerson (NYSE: EMR), St. Louis, MO, has agreed to acquire SPX Corp.’s 44.5 percent minority interest in EGS Electrical Group for $571 million, giving it 100 percent ownership of the business. Emerson and SPX have jointly held the business since 1997, with Emerson responsible for operational management and consolidation of results in its industrial automation segment.
EGS had annual revenues in 2013 of more than $500 million. The company is a global manufacturer of electrical products for commercial, industrial, hazardous and adverse environments. Although EGS serves a wide range of markets, its oil, gas and chemical participation has grown to more than half of total sales.
CEO David Farr said emerging opportunities with Emerson's process management and industrial automation businesses make now the right time to assume full ownership. “Historically, EGS has been a high-quality, niche market participant, with sales concentrated in North America,” he said. “As oil, gas and chemical market opportunities have developed, the potential for growth by leveraging Emerson’s strong process management and international channels has become increasingly attractive.”
The transaction is expected to close within two months.