Fortive to spin-off its precision tech segment, CEO to retire post split
Adds details about leadership changes in paragraph 7-9, updates throughout
Sept 4 (Reuters) -Industrial products maker Fortive FTV.N on Wednesday said it plans to spin off its Precision Technologies segment, creating two independent, publicly traded companies by the fourth quarter of 2025.
The new company, temporarily dubbed "NewCo," will comprise the brands currently operating under Fortive's Precision Technologies segment.
This segment offers electrical testing, measurement, sensing, and material technologies across various vertical end markets, including automotive and medical equipment.
Meanwhile, Fortive will retain its Intelligent Operating Solutions and Advanced Healthcare Solutions business segments.
"With industry-leading margins and cash flow generation, NewCo will be well-positioned to pursue organic growth investments, return cash to shareholders, and seek selective M&A opportunities," the company said.
Shares of the Everett, Washington-based company were up 4.2% in aftermarket trade.
Upon completion of the spin-off, Fortive CEO James Lico will retire and be succeeded by Olumide Soroye, who currently serves as CEO of the company's Intelligent Operation Solutions division.
CFO Chuck E. McLaughlin will retire by the end of the first quarter of 2025.
Tami Newcombe, the current President and CEO of Fortive's Precision Technologies and Advanced Healthcare Solutions business segments, will assume the role of President and CEO of the new company, it said.
Fortive stated it would distribute shares of the new company to its current shareholders based on their existing shareholdings, with no tax implications for them.
The company reaffirmed its Q3 2024 and full-year 2024 financial outlook. It expects its share repurchase program to enhance EPS growth in 2025, with plans to utilize approximately 75% of its available free cash flow for share repurchases.
Reporting by Abhinav Parmar in Bengaluru; Editing by Tasim Zahid
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