Exelis today announced a plan to spin-off its military and government services business, currently called Exelis Mission Systems, into an independent public company.
This business is currently part of the company's Information and Technical Services segment. The transaction is intended to be tax-free to Exelis and its shareholders, is expected to be completed by the summer of 2014, and is subject to final approval of the company's board of directors.
"We are repositioning our businesses to enhance our focus on the long-term growth drivers that will enable us to remain well-positioned in an evolving global market environment," said David F. Melcher, chief executive officer and president of Exelis. "Today's announcement follows a comprehensive review of our business and market dynamics. This spin-off enables both Exelis and Mission Systems to become more agile, better aligned and able to more effectively meet the needs of their customers, both domestically and internationally."
Following completion of the spin-off, Exelis will retain a portfolio of mission critical, affordable and platform agnostic products and services for managing global threats, conflicts and complexities. The business will focus future investments on strengthening its four strategic growth platforms of Critical Networks; ISR & Analytics; Electronic Warfare; and Aerostructures.
Pro-forma for the spin-off, Exelis is expected to generate 2013 estimated revenues of approximately $3.4 billion with meaningful appreciation in its growth and operating margin profile. Exelis also expects to continue its current quarterly dividend and maintain a capital structure consistent with investment-grade credit ratings.