Exelis To Spin Off Its Military And Government Services Business

(RTTNews) - Exelis Inc. (XLS) said Wednesday that its board of directors has approved a plan to spin-off its military and government services business, currently called Exelis Mission Systems, into an independent public company.

The business is currently part of the company's Information and Technical Services segment.

The spin-off is expected to be completed by the summer of 2014.

David Melcher, chief executive officer and president of Exelis, said, "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 Mission Systems will be renamed and rebranded as a new, independent company that provides industry-leading facilities management, logistics and network communications services. With nearly 7,000 employees currently operating in more than 100 locations in 18 countries, the Mission Systems business is well-positioned to deliver a broad range of capabilities as an independent entity.

Pro-forma for the spin-off, 2013 estimated revenue for the future company is estimated to be about $1.5 billion.

Effective upon the completion of the transaction, the new services company will be led by Kenneth Hunzeker, who has served as president and general manager of Exelis Mission Systems since April 2011.

Pro-forma for the spin-off, Exelis is expected to generate 2013 estimated revenues of about $3.4 billion.

Exelis said it expects to continue its current quarterly dividend and maintain a capital structure consistent with investment-grade credit ratings.