SPX Corp. is buying General Signal Corp., a maker of industrial and electrical controls, for about $2 billion just months after failing in its hostile bid for a rival.
Muskegon-based SPX, an automotive supply and parts company, said Monday it will pay $45 per share in cash and stock for the larger General Signal, which is based in Stamford, Conn.
The combined company will have $2.5 billion in sales.
SPX also will assume roughly $335 million of General Signal’s debt. SPX expects to wring between $55 million and $60 million in cost savings in the first year from the acquisition.
“This is a good transaction,” said Bear, Stearns & Co. analyst Eric Goldstein, who rates SPX a “buy.” “It gives them the same opportunities to cut costs and improve profits” that SPX seized in its own business in recent years.
The deal comes after SPX attempted a $3 billion hostile takeover of Branford, Conn.-based Echlin Corp. earlier this year before being outbid by Dana Corp. of Toledo.
The transaction is expected to close early in the fourth quarter. Shares of SPX on Monday fell $5.31, to $59.19, while shares of General Signal climbed $3.50, to $41.12.
