ITT Corp. Acquires SRA's ASO Group - Analyst Blog

ITT Corporation (ITT) completed the acquisition of SRA International's Airport Operations Solutions (AOS) group. The acquisition was initially announced in September 2010. Terms of the deals were not disclosed.

SRA International's ASO group is operating in North America since 1974 as a renowned supplier of airport solutions. The addition of ASO business will aid ITT Corporation in penetrating in the air traffic management industry. The company believes SRA's broad and spontaneous web-based application suite can be installed quickly and at a significantly lower cost by almost any airport and airline customer, instantly providing operational benefits.

AOS's secure centrally managed web-based airport operation management platform, AirScene.com, is deployed in more than 50 airports. The system manages important airport business functions such as revenue, surface operations and noise. The AOS group, located in Herndon, VA; Austin, TX and Boston, generated revenue of about $3.5 million in year ended June 30, 2010. It employs 17 full time people.

The company continues to make investments in attractive growth areas such as air traffic management, emerging market expansion, product innovation, defense adjacency, diversity strategy and analytical instrumentation. Recently, ITT Corporation made a number of strategic acquisitions, thus expanding its product portfolio and geographical presence.

The acquisition of Godwin Pumps expands the company's global position in water, wastewater and industrial processes, while also complimenting ITT's existing Fluid Technology portfolio. The company is particularly focused on its presence in the emerging markets. The acquisition of Canberra Pumps expands its footprint in Latin America, enabling it to provide more products to the growing oil and gas and mining markets there.

However, macroeconomic and business conditions, particularly in the local economies of the countries or regions in which ITT Corporation sells its products, may significantly and negatively affect its revenues, profitability and results of operations.

The company develops proprietary technology in the industries in which it operates, and relies on intellectual property laws and a number of patents to protect such technology. In doing so, it incurs ongoing costs to enforce and defend its intellectual property.

An inability to protect intellectual property could hurt its business. In addition, third parties may claim that it infringes on their intellectual property, and it could suffer significant litigation or licensing expense as a result.

Headquartered in New York City, ITT Corporation is a global multi-industry leader in high-technology engineering and manufacturing services. It is engaged in the design, manufacture, and sale of a wide range of engineered products and services for three vital markets: water and fluids management, global defense and security, and motion and flow control. Major competitors of ITT Corporation are Lockheed Martin Corporation (LMT) and Raytheon Co. (RTN).

We currently maintain our Neutral recommendation for the long term on ITT Corporation, with a Zacks #3 Rank (short-term Hold rating) over the next one-to-three months.

 
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