Exelis' board of directors have approved the planned spin-off of its mission systems division as an independent company called Vectrus.
In December 2013, Exelis initially announced the planned spin-off of the division which is currently part of its information and technical services segment.
The move will see Exelis being split into two separate publicly traded companies.
"The decision to create two well-capitalized independent companies underscores Exelis' commitment to ensuring that our strategic priorities are aligned with the best interests of our shareholders. Each company will have a solid strategy and strong leadership and be better equipped to serve the needs of its global customers. We are excited about the future for both Exelis and Vectrus," said Exelis President and CEO David Melcher said.
The Exelis board approved the distribution of all of the outstanding shares of Vectrus to its shareholders, who will own 100 percent of the common shares of Vectrus. The company confirmed that the distribution will not be taxable to holders of shares of Exelis common stock.
The company said each Exelis shareholder will receive one share of Vectrus common stock for every 18 shares of Exelis common stock held as of the close of business on September 18, the record date for the distribution.
The company is expected to distribute about 10 million shares of Vectrus common stock to Exelis shareholders, based on the current 188 million shares of Exelis common stock outstanding and the one-to-eighteen distribution ratio for the spin-off.
The distribution date will be September 27 and Vectrus shares will begin "regular way" trading on the New York Stock Exchange under the ticker symbol "VEC" on September 29. However, Vectrus will begin trading on a "when issued" basis under the symbol "VEC WI" on or about September 16. Meanwhile, Exelis shares will continue to trade under the ticker symbol "XLS."