ITT Tentatively Agrees to Sell 12 Companies
ITT said Monday that it had tentatively agreed to sell 12 industrial companies to Forstmann Little & Co. for $370 million in cash.
The companies would be acquired through a leveraged buy-out, where the purchase is made with largely borrowed funds that are repaid with the operating revenue of the acquired companies.
Forstmann Little is a privately held investment banking firm in New York that specializes in such buy-outs.
The proposed sale is part of ITT’s plan, announced Jan. 16, to shed assets it values at about $1.7 billion in a major extension of its effort to streamline the widely diversified company.
ITT now wants to concentrate on telecommunications, other high-technology interests, insurance and certain other services, such as lodging. ITT’s holdings include the Hartford Insurance Group and Sheraton Corp., the hotel chain.
ITT also hopes to use the funds from its asset sales to reduce its $4-billion debt and bolster its sluggish earnings.
After ITT announced the proposed sale, its common stock closed at $34.50 a share, down $1.25, on the New York Stock Exchange.
Contributed $600 Million
The 12 companies proposed for sale contributed about $600 million, or 14%, to the $4.34 billion in revenue posted by ITT’s industrial technology division in 1984, ITT said.
Overall, ITT earned $448 million, or $2.97 a share, last year. ITT’s revenue, including revenue from its insurance and finance operations, totaled $19.6 billion in 1984.
ITT said the 12 companies to be sold to Forstmann Little are:
- Blackburn Co., based in St. Louis, a maker of electrical products.
- Jennings, San Jose, a maker of vacuum capacitors and other electrical products.
- Lighting Fixtures division, Southaven, Miss., a maker of lighting fixtures.
- Meyer, Red Wing, Minn., a producer of steel electrical transmission poles.
- National Temperature Control Center, Evansville, Ind., a wholesaler of replacement parts for air conditioning and heating products.
- Phillips Drill, Michigan City, Ind., a maker of anchors used in the construction of masonry structures.
- Pneumotive, Monroe, La., a maker of air compressors and vacuum pumps.
- Reznor Division, Mercer, Pa., a producer of unit and duct heaters.
- Royal Electric, Pawtucket, R.I., a maker of copper-based electrical wire and cable products.
- Surprenant, Clinton, Mass., a manufacturer of specialty insulated wire and cable products.
- Thermotech, Hopkins, Minn., which molds thermoplastic engineered resins.
- United Plastics, Madison Heights, Mich., a maker of plastic products.
