ITT Corp plans to separate the company’s businesses into three distinct, publicly traded companies. Under the plan, ITT would execute tax-free spinoffs to shareholders of its water-related businesses and its Defense & Information Solutions segment. 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. “For nearly a century, ITT has been known for transformative strategies that create value for customers and shareowners,” said Steve Loranger, chairman, president and chief executive officer of ITT. “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. Each new company will be more nimble and able to build stronger, more intimate customer relationships to accelerate mutual success.
“We believe each of these future companies will be strategically well positioned for growth, nicely capitalized, with global capabilities, outstanding operating track records and world-class leadership. In addition, we believe the transformation plan will provide more focused opportunities for our employees, who will be instrumental in the future success of all three companies.”
Following completion of the spinoff, a standalone water technology corporation with a new corporate brand name will be formed through the combination of three of ITT’s current businesses: Residential & Commercial Water, Flow Control and Water & Wastewater (including biological, filtration and disinfection treatment and analytics). This company will be a global leader, with a very broad suite of innovative equipment, systems and applications.
The company is expected to benefit from an already strong installed base, driving attractive aftermarket opportunities, as well as a diverse global footprint with approximately 55% of revenues coming from international markets and strong emerging market growth prospects. Pro forma 2011 revenue for the future water technology business is estimated at $3.6 billion.
The water technology businesses will become a new company to be led by Gretchen McClain, currently President of ITT Fluid and Motion Control, who will serve as its future CEO. Its Executive Chairman of the board will be Steve Loranger, currently Chairman, President and CEO of ITT Corp.