Lone Star Sells SPX FLOW to ITT for $4.775 Billion
- Significant Transaction Value: Lone Star Fund XI, LP has signed an agreement to sell SPX FLOW to ITT for $4.775 billion in cash and stock, marking a successful strategic restructuring in the industrial, health, and nutrition markets.
- Extensive Market Coverage: SPX FLOW operates in over 25 countries with sales in more than 140 countries, and this transaction is expected to enhance ITT's competitiveness in global markets while diversifying its product portfolio.
- Management Optimization: With Lone Star's support, SPX FLOW has improved its sales execution and operational platform, enhancing product development quality, which is anticipated to lead to higher market share and customer satisfaction for ITT.
- Future Growth Potential: The transaction is expected to close by the end of Q1 2026, subject to regulatory approvals, marking a new phase of accelerated value creation for both ITT and SPX FLOW.
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ITT Increases Dividend for 14th Consecutive Year While Retaining 77% of Earnings
Dividend Safety and Growth: ITT maintains a low payout ratio of 22.9% and has a strong free cash flow coverage of 4.2 times its dividend obligations, allowing for consistent dividend growth at a 19% annual rate over the past five years.
Financial Stability: The company has a conservative debt to equity ratio of 0.41x and an impressive interest coverage ratio exceeding 22 times, indicating strong financial health and the ability to service its debt comfortably.
Dividend History: ITT has increased its dividend for over 14 consecutive years, demonstrating a commitment to returning value to shareholders, even during economic downturns like the 2020 pandemic.
Investment Consideration: While ITT offers a modest dividend yield of 0.76%, it is more suitable for investors focused on long-term dividend growth rather than immediate high yields.
ITT Announces Public Offering of 7 Million Shares at Set Price
Public Offering Details: ITT Inc. has priced its public offering of 7 million shares at $167 each, aiming for net proceeds of approximately $1.14 billion.
Use of Proceeds: The funds will primarily support the acquisition of SPX FLOW, Inc., with any unused proceeds allocated for general corporate purposes.
Underwriter Option: The company has granted underwriters a 30-day option to purchase an additional 1,050,000 shares at the same price of $167 per share.
Closing Date: The offering is expected to close on December 10.
