ITT to become three separate companies
The plan calls for the company to execute tax-free spinoffs to shareholders
- By David Hubler
- Jan 12, 2011
ITT Corp. has announced plans to split into three distinct, publicly traded companies.
Under the plan, which has the unanimous approval of the ITT board of directors, the company would execute tax-free spinoffs to shareholders of its water-related businesses and its Defense & Information Solutions segment, according to a company announcement today.
Following completion of the transaction, ITT will continue to trade on the New York Stock Exchange as an industrial company that supplies highly engineered solutions in the aerospace, transportation, energy and industrial markets, the statement said.
Under the plan, ITT shareholders will own shares in all three corporations.
The statement added that ITT senior management and its board of directors “believe these three businesses are well-positioned to create significant value for shareholders as standalone companies.”
After completion of the spinoff, ITT Corp. will continue to be a diversified global manufacturer of highly engineered industrial products and high-tech solutions. Its global platform will include ITT’s current Industrial Process business, as well as its Motion Technologies, Interconnect Solutions and Control Technologies businesses, the company said.
“In recent years, we have nurtured and grown our unique portfolio of businesses, which are now poised to emerge as three strong and focused standalone companies, with leading products and market positions, highly skilled employees and tremendous value-generating potential for shareowners,” Steve Loranger, chairman, president and chief executive officer of ITT, said in the announcement.
“In today’s business environment, we believe this strategy is the best approach to unlock this value and position the three businesses to grow and serve customers as focused global companies,” he said.
The plan is expected to be finalized and executed before the end of this year.
The ITT decision follows a similar plan announced last month by Motorola Inc. to divide into two separate entities at the start of the year, Motorola Mobility and Motorola Solutions.
Motorola Solutions will serve federal, state and local government clients while Motorola Mobility will continue the company’s 80-year tradition of building radio systems.
ITT, of White Plans, N.Y., ranks No. 14 on Washington Technology’s 2010 Top 100 list of the largest federal government contractors. Motorola, of Schaumburg, Ill., ranks No. 91 on the list.
David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.