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By Julian Nettlefold

20 Jun 11. BATTLESPACE Editor Julian Nettlefold met up with ITT Defense & Information Solutions at the Paris Air Show to discuss the structure of the new Company post-split.

On January 12th ITT Corporation announced that its board of directors had unanimously approved a plan to separate the company’s businesses into three distinct, publicly traded companies. Under the plan, ITT will 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 in the aerospace, transportation, energy and industrial markets. Under the plan, ITT shareholders will own shares in all three corporations following the completion of the transaction.

ITT senior management and its board of directors believe that these three businesses are well-positioned to create significant value for
shareholders as standalone companies. ITT expects to finalize and execute the plan before the end of the year.

“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. In today’s business environment, we believe this strategy is the best approach to unlock this value and position the three businesses to grow and serve customers as focused global companies. Each new company will be more nimble and able to build stronger, more intimate customer relationships to accelerate mutual success.”

Loranger continued, “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.”

Three Focused Businesses with Outstanding Growth Potential

Following completion of the spinoff, ITT Corporation will continue to be a diversified global manufacturer of highly engineered industrial products and high-tech solutions. Its global platform will include ITT’s current Industrial Process business, as well as its Motion Technologies, Interconnect Solutions and Control Technologies businesses. Pro forma 2011 revenue for the future ITT Corporation is estimated at $2.1 billion.

A global water technology leader

Following completion of the spinoff, a highly attractive, 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). Pro forma 2011 revenue for the future water technology business is estimated at $3.6 billion.

A highly engineered defense technology and information solutions provider

Following completion of the spinoff, the existing Defense & Information Solutions segment will be renamed and rebranded as a new standalone company that is an industry-leading provider of innovative technologies and operational services to meet the enduring requirements of the global military, government and commercial customers. Pro forma 2011 revenue for the new defense and information solutions business is estimated at $5.8 billion.

Each of the future companies is expected to have a capital structure, balance

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