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revenue from acquisitions, to grow by about 5% this year over 2010, with a 22% to 25% increase in
operating income.
"We realigned these businesses," Ramos said. "Now that we're getting top line growth, we'll get margin
improvement."
ITT's defense and information-solutions business will be the largest of the three new companies, with
annual revenue estimated at $5.8 billion.
Defense has been ITT's best-performing business segment in recent years as the company supplied
equipment for U.S. troops operating in Iraq and Afghanistan. The company's defense product portfolio
includes night-vision goggles, radios and jamming devices that disrupt signals to activate roadside
bombs. But sales and profit growth slowed significantly in 2010 as the U.S. Defense Department began
ratcheting down its spending.
Deep cuts in defense appropriations are expected in the coming years as the federal government looks to
lower budget deficits. In response, ITT has been expanding its defense business lines into civil aviation
and other non-defense sectors.
David Melcher, the current president of the defense unit, will be the chief executive of the new company.
ITT director Ralph Hake, who previously served as chief executive of appliance maker Maytag Corp., will
be the defense company's chairman.
The separation of the company is subject to regulatory approvals but doesn't require a vote by
shareholders, who would own stock in all three companies following the deal.
The breakup follows Motorola Inc. separating its consumer-focused smartphone and set-top-box business
from its business mobile and networks divisions at the end of last year, splitting into Motorola Mobility
Holdings Inc. (MMI) and Motorola Solutions Inc. (MSI). Food giant Sara Lee Corp. (SLE) and Fortune
Brands Inc. (FO), the maker of Jim Beam whiskey, Moen faucets and Titleist golf clubs, are both moving
forward with plans to split their businesses.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com
Matt Jarzemsky contributed to this article.