ITT's acquisitions bolster business

Company builds defense unit into the billions

ITT Corp. spent 2008 capitalizing on a spate of acquisitions it made during the past two years to boost its defense electronics and services unit revenue by 50 percent to $6.3 billion, or 53 percent of the company’s overall revenues.

“We had a very successful year,” said David Albritton, the division's vice president of communications, “and our goals this year are even higher.”

The company’s successes were good enough to land it at No. 11 on the Top 100 list with nearly $2.6 billion in prime contracting revenue.

Among other major wins in 2008, the NASA Goddard Space Flight Center picked ITT to perform telemetry, tracking and command services for near-Earth missions under the Space Communications Network Services contract. That contract, worth as much as $1.26 billion, extends ITT’s support of NASA’s communications networks. 

The company also was one of six prime contractors to receive an Air Force task order for providing management and professional support services to the Strategic Command, including analysis, engineering and technical services. The contract could be worth as much as $900 million over five years.

Also, the Air Force Air Combat Command’s Acquisition Management and Integration Center awarded ITT the Tethered Aerostat Radar System contract. The TARS aerostat mission includes low-level radar for drug and air sovereignty surveillance. The base value of the contract is $33.6 million.

ITT’s acquisitions also helped expand its roster of federal customers, which include the Defense Department, NASA, intelligence agencies and the Federal Aviation Administration. For example, the 2007 acquisition of EDO Corp. expanded its military clientele beyond the Army to all services.

In December, David Melcher, previously head of strategy, business development and international sales for ITT’s defense business, was named president of ITT Defense Electronics and Services. Melcher succeeded Hank Driesse, who was acting president of ITT Defense since April 2008.

ITT’s Defense Electronics and Services unit “is a little different from a pure services companies, but they’re probably a good sign of where things are going,” said Anita Antenucci, managing director at Houlihan Lokey. “They have the capability to shift business models between services, software and boxes according to what the customer needs.”

In this economic and political environment, agencies are transforming their missions and trying to do more with less. ITT is well positioned to aid in that process, Albritton said. The company is not dependent on major platforms for its success, he added.

The division’s commitment to Six Sigma, value-based processes and alliances with small-business partners is contributing to ITT’s ability to deliver the efficiencies agencies need to meet those requirements, Albritton said.

The company is also mining opportunities to offer improvements to deployed products and systems, such as secure point-to-point communications for soldiers. “After the drawdown, there will still be forces in Iraq, and our role allows them to go into harm’s way in the safest possible fashion,” he said.

The division “is exceptionally well positioned, with very strong communications and sensor business,” Antenucci said.

ITT is also targeting cybersecurity, homeland security and the international market as venues for growth.

Albritton said that although people associate ITT more closely with battlefield gear, such as night vision goggles and tactical radios, and less closely with engineering, “there is a whole depth and breadth of solutions we provide and a global network to our business.”

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About the Author

Lisa Terry is a contributing writer to Washington Technology.

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