Скачать или смотреть ITT Stock Offering Funds SPX FLOW Acquisition: Analysis

ITT Prices $1.14 Billion Stock Offering To Fund SPX FLOW Deal

Today we’re looking at ITT Inc.’s big capital move. The industrial tech and engineering group ITT has just priced an underwritten public offering of 7,000,000 new shares at $167 per share, with an additional 1,050,000-share greenshoe option for underwriters. The company expects around $1.14 billion in net proceeds, mainly to help fund its previously announced acquisition of the SPX FLOW business.

WINNERS

Industrial flow and process equipment
Reason: The deal underlines strong demand in pumps, valves and fluid handling. A bigger ITT plus SPX FLOW can lift sentiment for the whole flow and process equipment space.
Names: ITT Inc - $ITT, Emerson Electric - $EMR

Automation and motion control suppliers
Reason: Larger, more complex process assets tend to spend more on automation, sensing and motion control as they integrate new product lines and chase efficiency.
Names: Rockwell Automation - $ROK, Parker Hannifin - $PH

Investment banks and capital markets players
Reason: A billion dollar plus equity raise around a big industrial deal keeps the ECM and M and A fee machine running and can trigger copycat deals from peers.
Names: Goldman Sachs Group - $GS, UBS Group - $UBS

LOSERS

Existing ITT shareholders and other equity funded acquirers
Reason: New shares mean dilution and the stock already slid on the announcement. Traders often sell first and wait for proof that the acquisition really drives earnings.
Names: ITT Inc - $ITT, Ingersoll Rand - $IR

Mid cap flow and water technology peers
Reason: A larger, well financed ITT SPX FLOW combination becomes a tougher competitor in industrial and infrastructure projects, which can pressure pricing and margins at smaller rivals.
Names: Xylem - $XYL, AO Smith - $AOS

Highly leveraged industrial conglomerates
Reason: ITT choosing equity over heavy new borrowing sends a signal. Investors may push more indebted industrials to raise equity rather than rely on cheap debt for big acquisitions, which can weigh on their share prices.
Names: General Electric - $GE, 3M Company - $MMM

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