WHITE PLAINS, N.Y. — ITT said it plans to divide into three publicly traded companies focused on water management, aerospace and defense, and industrial products. The move is intended to decouple the diversified industrial conglomerate’s commercial businesses from its defense segment, which faces headwinds in the coming years from lower U.S. spending on military programs.
ITT’s Mission Systems business unit, part of the Defense & Information Solutions segment that’s being spun off, is based in Colorado Springs, where it employs about 800 people. Those jobs and Mission Systems’ operations are not affected by the split, company spokesman George Rhynedance said.
“For us, it’s business as usual,” he said. “We’re not changing anything at this point.”
Investors will receive shares for each of the new companies. ITT’s stock closed Wednesday up 16.5 percent at $61.50 a share.
ITT will continue as an industrial-products company that will primarily be made up of the company’s motion and flow-control unit, which supplies components and industrial-process technologies to the automotive, aerospace, rail, energy and beverage industries. ITT sees this company generating $2.1 billion in revenue in 2011.
The water business, which has been expanding recently from a series of acquisitions, is expected to have annual revenue of $3.6 billion. The company will be focused on the testing and treatment of water and wastewater from municipalities and industrial companies.
Defense has been ITT’s best-performing business segment in recent years as the company supplied equipment for U.S. troops operating in Iraq and Afghanistan.
Dow Jones Newswires; Greg Griffin, The Denver Post
