CHICAGO—ITT Corp. agreed to sell its defense-engineering and technical-assistance firm to privately held Wyle Inc. for $235 million, as ITT continues to realign its military business.
The defense and industrial conglomerate revealed last month that it planned to sell CAS Inc., which is part of ITT's defense and information solutions segment, the company's largest business segment.
With cuts in U.S. defense spending expected in the coming years as military operations in the Middle East end, the White Plains, N.Y., company has been bulking up its other business segments and trying to replace military contracts that are ending or in jeopardy of being axed with defense and aerospace programs that are likely to be spared.
CAS was a particular target for divestment because the firm posed a potential conflict of interest with ITT's other military business units. CAS provides engineering and technical advice to the Pentagon on contracts and programs that other ITT defense units may bid on.
For Hunstville, Ala.-based Wyle, the addition of CAS will expand its military revenue.
"The Navy and the Army will now be our largest customers," Chairman and Chief Executive George Melton said in a written statement.
Wyle provides high-tech science, aerospace engineering and information technology services to the federal government. It also provides testing and evaluation services. Wyle plans to finance the deal with cash, $20 million of equity from its controlling shareholder, private-equity firm Court Square Capital Partners, and $200 million in debt.
The deal is expected to close by year's end.‹
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