ITT Industries Sets Strategic Review of Its Automotive Operations
18 March 1998
ITT Industries Sets Strategic Review of Its Automotive Operations, Seeking to Create Greater Long Term Value
WHITE PLAINS, N.Y., March 18 -- ITT Industries, Inc.
today announced that it has launched a strategic review of its
automotive business and has retained financial advisors to assist in the
review.
"Over the past two years, we have been resolute in our determination to
create greater value for all of our businesses," said Travis Engen, chairman,
president and chief executive of ITT Industries. "We have refined our
enterprise, making both strategic divestitures and acquisitions. We have
become the world's leading producer of pumps and valves through our purchase
of Goulds Pumps, and grown both our electrical connector and defense
businesses."
"Our automotive units are sound, highly competitive businesses with
leading market positions, and outstanding reputations for quality and
service," Mr. Engen added. "We have maintained a solid level of profitability
in these operations in the face of extreme competitive forces, and we have
positioned them for steadily improving earnings. They remain terrific
businesses, and our intent through this review is to determine the most
effective way to maximize their value."
The review -- focusing on the businesses involved in engineering,
manufacturing and marketing automotive brakes, chassis modules and electrical
systems in the U.S. and abroad -- will involve an examination of all strategic
alternatives, including the possible sale of one or more of these major
businesses. This review does not include the remaining lines of business
comprising the automotive segment which account for approximately twenty
percent of overall automotive sales: the Components Group, producing fluid
handling, friction and shock absorber products, and the Automotive Switch
business. The company has engaged Lazard Freres & Co. L.L.C. and Goldman,
Sachs & Co. to assist in the review. No target date has been set for
completion of the evaluation.
Mr. Engen said that should the review result in a sale, "proceeds from the
sale would be used to finance further internal and/or external growth of core
businesses, or to repurchase common stock, pay down debt, or some combination
of these uses."
ITT Industries is among the largest independent suppliers of components,
systems, and modules to all 28 major motor vehicle manufacturers worldwide, as
well as to the automotive aftermarket. In 1997, sales of continuing
businesses in the automotive business totaled approximately $4.7 billion of
ITT Industries total sales of $8.5 billion. Sales of the automotive
businesses involved in the review totaled approximately $3.9 billion.
With sales of $2.2 billion last year, the Brake and Chassis unit is a
world leader in the design and manufacture of antilock brake systems (ABS) and
traction control systems (TCS). Building on those technologies, it is now
launching its new Electronic Stability Program (ESP) which combines elements
from existing ABS and TCS systems with new features to provide drivers with
even greater control of their vehicles.
The Electrical Systems unit had 1997 sales of approximately $1.7 billion
for the units under review, which include wiper systems, air management
components, lamps, and electric motors for power windows and other
applications.
The Components group and electrical switch business, which are not part of
the strategic review, had 1997 sales of approximately $800 million.
ITT Industries ( http://www.ittind.com ) is a leading worldwide
diversified manufacturing company, with 1997 total sales of $8.8 billion
dollars from its three primary business segments: Automotive, Defense &
Electronics, and Fluid Technology. ITT Defense & Electronics is a leader in
the design, manufacture and support of high technology electronic systems and
components for defense and commercial markets. ITT Fluid Technology is the
world's leading manufacturer of pumps, systems and services for the movement,
measurement, and control of fluids.
Under the symbol "IIN," ITT Industries is listed on the New York Stock
Exchange and the Midwest, Pacific, London, Frankfurt, and Paris exchanges.
ITT Industries and its subsidiaries' press releases are available at no
charge via fax and the Internet. To receive releases by fax, call
800-758-5804, extension 110006. For ITT Industries' news on the Internet,
visit http://www.ittind.com or http://www.prnewswire.com
SOURCE ITT Industries, Inc.