Davis Polk advised the initial purchasers and dealer managers in connection with a series of transactions to finance the anticipated spinoff of ITT Corporation’s defense and water businesses. Following the spinoff, ITT, Exelis Inc. (which will operate the defense business) and Xylem Inc. (which will operate the water business) will be three distinct, publicly traded companies.
Davis Polk advised the initial purchasers on offerings of $1.85 billion aggregate principal amount of senior unsecured notes. The notes were offered in four tranches under Rule 144A and Regulation S. We advised J.P. Morgan Securities LLC, RBS Securities Inc. and Wells Fargo Securities, LLC as representatives of the initial purchasers in the offering by Xylem of $600 million aggregate principal amount of its 3.55% senior notes due 2016 and $600 million aggregate principal amount of its 4.875% senior notes due 2021. We advised Barclays Capital Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC in the offering by Exelis of $250 million aggregate principal amount of its 4.25% senior notes due 2016 and $400 million aggregate principal amount of its 5.55% senior notes due 2021. The notes are subject to a registration rights agreement and are initially guaranteed on a senior unsecured basis by ITT. The guarantee will terminate upon the distribution of the common stock of Exelis and Xylem to holders of ITT’s common stock in connection with the spinoff of Exelis and Xylem from ITT, which is expected to occur before the end of the year.
Davis Polk also advised J.P. Morgan Securities LLC and RBS Securities Inc. as dealer managers in connection with ITT’s cash tender offer for up to $100 million of its outstanding 7.4% debentures due 2025. ITT intends to use a portion of the net proceeds from the notes offerings to fund the tender offer and to legally defease any debentures not tendered and purchased in the tender offer.
Headquartered in White Plains, New York, ITT is a high-technology engineering and manufacturing company operating on all seven continents in three vital markets: water and fluids management, global defense and security, and motion and flow control.
The Davis Polk corporate team for the notes offerings included partner Richard A. Drucker and associates Melissa Glass, Arvin I. Abraham, Ashley M. Bryant, Liang Dong and Robert Rosen (not yet admitted). Counsel Loyti Cheng and associate Ona Oshen provided environmental advice. Partner Lucy W. Farr and associate Juelle Gomes provided tax advice. Caroline B. Cima was the legal assistant on the transaction. All members of the Davis Polk team are based in the New York office.
The Davis Polk corporate team for the tender offer included partner Richard A. Drucker and associates Melissa Glass and Liang Dong. Partner Michael Farber and associate Yuliya Epifantseva provided tax advice. Joshua Sills was the legal assistant on the transaction. All members of the Davis Polk team are based in the New York office.
