No. 14: ITT maps its future
Acquisitions, contract wins reach for the sky
ITT Corp. made a series of strategic acquisitions
last year, snapping up Dolphin
Technology Inc., EDO Corp. and
International Motion Control Inc.
The first acquisition came in June when
ITT paid $395 million for IMC, a developer
of motion-control products ? specifically,
energy absorption, industrial and aviation
control, and automation technology.
In August, the company bought Rome,
N.Y.-based Dolphin Technology, a developer
of information assurance technologies used
in secure networks for military, intelligence
and law enforcement users.
The buying spree culminated in December
with ITT pledging $1.8 billion to unite
EDO's business with its own sensing and
Much of such merger
and acquisition activity
is a result of targeting particular
markets or achieving
a size or income goal,
said Alan Chvotkin, executive
vice president and
counsel at the Professional
Services Council, of
"But the government customer ? here it's
the Defense Department ? substantially
affects the marketplace by how it allocates
spending," he said.
At No. 14 on the 2008 Top 100 list with
$1.8 billion in prime contracting revenue,
ITT is a heavy hitter in a defense market that
only got bigger with the EDO acquisition.
The move consolidated market share and put
ITT in position to use the company's
strengths and win contracts such as:
- Joint Strike Fighter: EDO won a $54.4 million
contract in November for continued
work on the Air Force's F-22.
- Ballistic Missile Defense System: EDO won a
$55 million evaluation
and assessment contract
- Navy Littoral Combat Ship:
EDO won a $23 million
contract for unmanned
surface vehicle systems
- Counter improvised explosive
device programs: In
April 2007, the Defense Department
signed EDO to deliver $88 million worth
of CREW 2.1 vehicle-mounted electronic
jammers, then increased the award several
times for a 2007 total of $563.5 million.
EDO's total revenue for 2006 was $715
ITT also ended the year
well. A key win came in
September when the
the company to replace
its air traffic control system
over three years for
With options, the contract
could be worth as much as $1.86 billion
That was a great recovery from its March
2007 fall from grace, when ITT became the
first major defense contractor to be convicted
of violating the Arms Export Control Act.
ITT used the setback to power a rebound.
"In 2007, we took the time to assess our
culture and rebalance our vision," company
officials said in ITT's annual report. "We
started by aligning ourselves around
who we are and where we're going as an
The company strengthened its ethics and
compliance organization, bringing in for a
four-year term an outside special compliance
officer who was given broad authority. It also
expanded an ombudsman program to make
such rigor a bottom-up concern.
Internal research became a greater priority.
Of the $100 million the company was
fined for exporting classified or sensitive
technical data about its night-vision gear to
China, Singapore and Britain without U.S.
authorization, $50 million is to be spent by
ITT during five years to develop new nightvision
technology for the U.S. military.
Targeted acquisitions brought it new
defense-centric capabilities. Also, buttressed
by the EDO acquisition, company officials
said in the 2007 annual report, ITT expects
to take its place as a "Top 10 U.S. defense
contractor," with 2008 revenues topping
In January, ITT won a $175 million task
order from the Army for its night-vision
gear. And in April, the company announced
it will be going after a nearly $1 billion contract
to upgrade the Bulgarian army's communications