ITT Corp. (ITT) is set to acquire SRA International’s (SRX) Airport Operations Solutions (AOS) group, a provider of airport-related solutions in North America. More than 50 large airports currently utilize AOS’ secure centrally monitored Internet-enabled operational platform, AirScene.com, which provides critical airport support functions such as management of surface operations and noise levels.
The acquisition of the AOS group will strengthen ITT’s portfolio as it charts its path for a stronger foothold in the air traffic management industry. The transaction is expected to close by the end of FY10, pending customary closing conditions.
ITT plays an important role in vital markets, including water and fluids management, global defense and security, and motion and flow control. It possesses industry leading brands in the Fluid Technology and Motion & Flow Control businesses. The company is well diversified and serves attractive end markets with a broad geographic footprint.
We are particularly bullish about the company’s two business segments: a) water equipment (primarily pumps), which should benefit from the replacement and upgrade of ageing networks in developed markets and the build-out of infrastructure in emerging markets, and b) the Defense business, with the bulk of sales derived from electronic and network-centric warfare.
The company’s Defense Electronics and Services segment develops, manufactures, and supports high-technology electronic systems and components for worldwide defense and commercial markets, and provides communications systems and engineering and applied research. Principal manufacturing facilities are located in the United Kingdom and United States of America.
Adverse macroeconomic and business conditions, particularly in the local economies of the countries or regions where the company operates, may negatively affect revenues, profitability and operations.
ITT Corporation, with 2009 revenues of $10.9 billion, is a global multi-industry leader in high-technology engineering and manufacturing. It is engaged in the design, manufacture and sale of a wide range of engineered products and provision of services.
We currently have a Neutral recommendation on ITT Corporation.
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