No. 14: ITT maps its future
Acquisitions, contract wins reach for the sky.
ITT Corp. made a series of strategic acquisitionslast year, snapping up DolphinTechnology Inc., EDO Corp. andInternational Motion Control Inc.The first acquisition came in June whenITT paid $395 million for IMC, a developerof motion-control products ? specifically,energy absorption, industrial and aviationcontrol, and automation technology.In August, the company bought Rome,N.Y.-based Dolphin Technology, a developerof information assurance technologies usedin secure networks for military, intelligenceand law enforcement users.The buying spree culminated in Decemberwith ITT pledging $1.8 billion to uniteEDO's business with its own sensing andsurveillance capabilities.Much of such mergerand acquisition activityis a result of targeting particularmarkets or achievinga size or income goal,said Alan Chvotkin, executivevice president andcounsel at the ProfessionalServices Council, ofArlington, Va."But the government customer ? here it'sthe Defense Department ? substantiallyaffects the marketplace by how it allocatesspending," 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 thatonly got bigger with the EDO acquisition.The move consolidated market share and putITT in position to use the company'sstrengths and win contracts such as: ITT also ended the yearwell. A key win came inSeptember when theFederal AviationAdministration tappedthe company to replaceits air traffic control systemover three years for$207 million.With options, the contractcould be worth as much as $1.86 billionthrough 2025.That was a great recovery from its March2007 fall from grace, when ITT became thefirst major defense contractor to be convictedof violating the Arms Export Control Act.ITT used the setback to power a rebound."In 2007, we took the time to assess ourculture and rebalance our vision," companyofficials said in ITT's annual report. "Westarted by aligning ourselves aroundwho we are and where we're going as anorganization."The company strengthened its ethics andcompliance organization, bringing in for afour-year term an outside special complianceofficer who was given broad authority. It alsoexpanded an ombudsman program to makesuch rigor a bottom-up concern.Internal research became a greater priority.Of the $100 million the company wasfined for exporting classified or sensitivetechnical data about its night-vision gear toChina, Singapore and Britain without U.S.authorization, $50 million is to be spent byITT during five years to develop new nightvisiontechnology for the U.S. military.Targeted acquisitions brought it newdefense-centric capabilities. Also, buttressedby the EDO acquisition, company officialssaid in the 2007 annual report, ITT expectsto take its place as a "Top 10 U.S. defensecontractor," with 2008 revenues topping$6 billion.In January, ITT won a $175 million taskorder from the Army for its night-visiongear. And in April, the company announcedit will be going after a nearly $1 billion contractto upgrade the Bulgarian army's communicationssystem.
- 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
in September. - Navy Littoral Combat Ship:
EDO won a $23 million
contract for unmanned
surface vehicle systems
in March. - 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
million.
NEXT STORY: No. 15: Charging back to the front