Watts Industries Inc. (nyse: wts) announced in late December it plans to separate its industrial, oil and gas business from its plumbing, heating and water quality business, which designs, manufacturers and sells valves.
The split, according to a company spokesperson, will take place before September 1999, pending government approval. The new company does not yet have a name.
“We’re not well recognized by Wall Street,” said company spokesperson Ken McAoy. “We’re a $100 million company and it’s difficult to identify who we are.”
McAvoy said the two companies operate on different economic cycles. The oil, industrial and gas business has been affected by the Asian and Russian economic woes. The division will allow each company to focus on its own strategic business objectives.
Watts is looking to raise capital for the company by going to the public market. To accomplish the separation, Watts will spin-off the new subsidiary to the Watts stockholders in the form of a stock dividend.