ITT Industries Announces Sale of Auto Brake & Fuel Tubing Business to Cooper-Standard Automotive for $205 Million
- Divestiture moves portfolio closer to achieving premier multi-industry performance
- Benefits include improved growth profile, increased margins, more efficient use of capital
- ITT to use proceeds to pay down debt and grow core businesses
- Company conducting strategic review of businesses within Electronic Components
WHITE PLAINS, N.Y., Dec. 5 -- ITT Industries, Inc. today announced that it has signed a definitive agreement to sell its automotive brake & fuel tubing and components business to Cooper-Standard Automotive, a privately-held company, for $205 million in cash. The business, one of the top global manufacturers of steel and plastic tubing for fuel and brake lines and quick-connects, serves the transportation industry with reported 2004 revenues of $437 million. Both parties expect to finalize the transaction in the first quarter of 2006, subject to customary closing conditions and regulatory approval.
"This transaction is consistent with our value-based strategy of focusing ITT's assets and attention on our core businesses, such as advanced water treatment, water and wastewater solutions, space, defense electronics, systems and services, and leisure marine in order to provide greater potential for growth and profitability," said Steve Loranger, Chairman, President and Chief Executive Officer of ITT Industries. "This transaction creates value for ITT, Cooper-Standard and the employees of the auto tubing business, allowing us to focus our resources on our strong growth platforms, and giving Cooper-Standard a well-positioned world-class supplier of components that compliment their existing product lines."
"With this transaction, we are moving our portfolio closer toward achieving premier multi-industry performance, with an improved growth profile, increased margins and a more efficient use of capital," Loranger said.
ITT's auto tubing business employs approximately 3,500 people in seven countries, with major manufacturing sites in the U.S., Canada, Mexico, Germany, France and the Czech Republic.
Loranger said the revenue and earnings from its automotive tubing business will be moved into discontinued operations, reducing full-year 2005 earnings per share (EPS) by an estimated 18 cents per share, resulting in a full-year 2005 earnings from continuing operations of between $5.17 and $5.22. Loranger said the company is also reviewing its businesses within the Electronic Components group to determine which businesses are consistent with ITT's long- term financial objectives, and pointed to the likelihood that the company will take a special charge of $200 - $275 million in the fourth quarter, primarily related to a non-cash asset impairment charge. The company expects to announce its strategic intent for the businesses within the Electronic Components group during its December 16 guidance call forecasting 2006 earnings.
ITT will host an investor briefing to outline details of the transaction on Monday, December 5, 2005 at 10:30am EST. The briefing can be monitored live on the Internet beginning at 10:30am at the following address on the company's web site: http://www.itt.com/ir.
A replay of the briefing will be available on the Internet, and telephonically until Monday, December 12, 2005 at 6:00pm EST. Those desiring to hear the replay on the telephone should call 973-341-3080 (PIN #6793832).
About Cooper-Standard Automotive
Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the transportation industry. Cooper- Standard Automotive Inc. employs more than 13,000 people across 47 facilities in 14 countries. Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners 2000.
About ITT Industries
ITT Industries, Inc. (www.itt.com) supplies advanced technology products and services in key markets including: fluid and water management including water treatment; defense communication, opto-electronics, information technology and services; electronic interconnects and switches; and other specialty products. Headquartered in White Plains, NY, the company generated $6.8 billion in 2004 sales. In addition to the New York Stock Exchange, ITT Industries stock is traded on the Midwest, Pacific, Paris, London and Frankfurt exchanges.