ITT Board Approves Spinoffs Of Fluid Technology, Defense System Divisions
ITT Corp. announced that its board has approved the split of the company into three distinct entities: ITT, Xylem (the fluid technology business, which includes Bell & Gossett, McDonnell & Miller and Goulds Pumps brands) and ITT Exelis (the defense and information solutions business).
“By operating as three independent companies, we believe the new ITT, Xylem and ITT Exelis will each be able to leverage our shared history of innovation while being better positioned to capitalize on new opportunities in their respective markets,” said Steve Loranger, chairman, president and chief executive officer of ITT.
The ITT board approved the distribution of all of the issued and outstanding shares of ITT Exelis and Xylem common stock on Oct. 31 to ITT shareholders of record as of the close of business on Oct. 17. In connection with this distribution, each ITT shareholder will receive one common share of ITT Exelis and one common share of Xylem for each share of common stock of ITT held at the close of business on the record date - ITT shareholders will own 100 percent of the common shares of ITT Exelis and Xylem.
The board also approved a 1:2 reverse stock split for the new ITT, which will become effective following the market close on Oct. 31. Under the reverse stock split, every two common shares of ITT will be converted into one common share of ITT. As a result, ITT will have approximately 92.5 million common shares outstanding after the reverse stock split.
ITT’s quarterly dividend for the fourth quarter, after giving effect to the reverse stock split, of 9.1 cents per share will be given to shareholders of record on Nov. 11, 2011 (equivalent to 4.55 cents per share on a pre-reverse stock split basis), payable Dec. 31, 2011. ITT expects that, after the spinoffs, ITT Exelis will declare a fourth-quarter dividend of 10.33 cents per share and that Xylem will declare a fourth-quarter dividend of 10.12 cents per share, so that the aggregate fourth-quarter dividend for the three companies combined will equal ITT’s prior quarterly dividend rate of 25 cents per share.
Following the spinoffs, all three companies will be listed on the New York Stock Exchange. ITT shares will continue to trade on the NYSE under the ticker symbol “ITT.” ITT Exelis shares will trade under the symbol “XLS,” while Xylem shares will trade under the symbol “XYL.”
New BoardThe company also announced that the board of directors that will lead ITT following the completion of the spinoffs will be:
- Frank T. MacInnis, chairman of the ITT board, former chief executive officer of EMCOR Group and an ITT director since 2001.
- Denise L. Ramos, who will become ITT’s chief executive officer and president effective upon the completion of the spinoffs and who is currently ITT’s chief financial officer.
- G. Peter D’Aloia, former senior vice president and chief financial officer of American Standard Companies, who will become an ITT director effective upon completion of the spinoffs.
- Donald DeFosset Jr., former chairman of James Hardie Industries N.V., who will become an ITT director effective upon completion of the spinoffs.
- Christina A. Gold, former chief executive officer of The Western Union Co. and an ITT director since 1997.
- Paul J. Kern, senior counselor of The Cohen Group and an ITT director since 2008.
- Linda S. Sanford, senior vice president of Enterprise Transformation, IBM, and an ITT director since 1998.
- Markos I. Tambakeras, former chairman, president and chief executive officer of Kennametal and an ITT director since 2001.
For more information, visit www.itt.com/transformation.