The pump world is buzzing about the recent news of ITT Corporation's decision to split the company into three distinct, publicly-traded companies. In fact, the entire world is talking about it. Coverage can be found in Forbes Magazine, The Wall Street Journal, Fox Business, CNN, Reuters, The New York Times, The Los Angeles Times, USA Today, CNBC and of course, Pumps & Systems.
Simply put, ITT's water business and defense segments become stand-alone, publicly-traded companies. The Industrial Process business remains part of ITT Corporation. The plan was approved by ITT's board of directors, did not require a shareholder vote and is expected to be finalized before the end of 2011.
Each corporation will have its own independent board of directors, and each of ITT's current board members has committed to serve on one or more of the boards of these companies. Upon completion of the transaction, each company is expected to be listed separately on the New York Stock Exchange.
ITT is enthusiastic about the possibilities and opportunities for each group to be more responsive to each individual business. Regardless of how this affects ITT directly, the readers of P&S are curious as to how this affects the industry as a whole.
We have reported for many years about the impact of mergers and acquisitions in the industries we cover. Has market share consolidation peaked? Will specialization with a targeted customer focus find an even more successful strategy for pump companies to grow and compete in the global business environment? Until this uncoupling, M&A has been a one-way path. Will there be more spinoffs and breakups if this is successful for shareholders of the new companies? Time will tell.
For end users, will the supply of ITT's pumps, parts and services affect sales channels to the customers? I can tell you this . . . ITT has gone out of its way to ensure its customers that it is “business as usual.” It has assured distributors and company employees the same.