Exelis to Spin Off Mission Systems Business Into a New Publicly Traded Services Company, Known as Vectrus
On December 11, 2013
Exelis announced its plan to spin off part of its Information and Technical Services segment, currently known as Exelis Mission Systems, into an independent public company, which will be named Vectrus. The transaction is intended to be tax-free to Exelis and its shareholders and has been approved by the company's board of directors. The record date for the transaction has been set for September 18, 2014
and the distribution date for shares of Vectrus is September 27, 2018
. This website will be updated regularly and is intended to be a source for publicly disclosed information on the spin-off and the two companies that will result from it.
Following completion of the spin-off, Exelis will retain a portfolio of mission critical, affordable and platform agnostic products and services for managing global threats, conflicts and complexities. The business will focus future investments on strengthening its four strategic growth platforms of Critical Networks; ISR & Analytics; Electronic Warfare; and Aerostructures. These growth platforms, which have been strategically aligned with future customer requirements, are supported by the company’s most differentiated and enduring C4ISR capabilities such as global intelligence, surveillance and reconnaissance systems, networked communications, integrated electronic warfare, and engineering and professional services.
Following completion of the spin-off, Vectrus will be a new, independent company that provides infrastructure asset management, information technology and network communication services, and logistics and supply chain management. As a pure-play services provider, the new company will capitalize on more than 50 years of experience delivering service solutions to a wide range of customers. With nearly 7,000 employees currently operating in more than 100 locations in 18 countries, Vectrus is well-positioned to deliver a broad range of capabilities as an independent entity. From facilities management and full spectrum logistics support to operating and maintaining networks and communication infrastructure, the new company will leverage its reputation and decades-long track record as a leading provider of services to the U.S. government to offer a unique value proposition based on efficiency, operational excellence and cost-effectiveness.News Releases
• Exelis Board Approves Spin-off of Vectrus as Separate, Publicly Traded company; Sets Record and Distribution Dates
• Exelis Services Company Spin-Off to be Named Vectrus
• December 11, 2013 Spinoff Announcement
Frequently Asked Questions• Why are we separating the Mission Systems business from Exelis?
• How will this spin-off plan affect customers? Will the current service model change?
For the future success of Exelis, our choice was to make a significant shift in the portfolio away from the mature, war-related services offerings represented in our Mission Systems business to concentrate more on the emerging customer needs across the C4ISR and informational domain. With that in mind, we have chosen to focus investment, business development and organic and inorganic growth around four Strategic Growth Platforms (SGPs) – Critical Networks, ISR & Analytics, Electronic Warfare and Aerostructures. The transaction will also benefit Vectrus. As an independent government and military services company, the post-spin Mission Systems business will be better able to leverage the global presence, processes, relationships and people that have made it such a well-performing part of the Exelis portfolio. The transaction will create conditions favorable for Vectrus to capitalize on new opportunities for growth. Both companies are expected to have leading market positions, highly skilled employees and tremendous value-generating potential for shareholders, customers and employees.
By and large, the spin-off process will have no immediate effect on how we do business with our customers. We are committed to a seamless spin-off and will continue to keep our customers informed of our progress throughout this process. As part of today’s initial announcement, we sent information to each of our customers and their program staffs informing them of this great news and assuring them that we will remain the provider they have come to know, delivering the results they have come to expect. Until the spin-off, it will be business as usual at Exelis and customers’ day-to-day contacts will not change as a result of this announcement.
• What is the timeline to complete the spin-off process? On September 8, 2014, Exelis announced that its board of directors had approved the spin-off transaction, set the record date for the transaction as September 18, 2014 and the distribution date for shares of Vectrus as September 27, 2014.
• How will shares of Vectrus stock be distributed to current Exelis shareholders?
Upon completion of the distribution, Exelis shareholders will own 100% of the common shares of Vectrus. No fractional shares of Vectrus common stock will be distributed. Fractional shares of Vectrus common stock will be aggregated and sold on the open market, and the aggregate net proceeds of the sales will be distributed ratably in the form of cash payments to Exelis shareholders who would otherwise be entitled to receive a fractional share of Vectrus common stock.
In connection with the distribution of shares of Vectrus common stock, Exelis Inc. will receive an opinion of tax counsel confirming that the distribution will not be taxable to holders of shares of Exelis common stock. Cash received in lieu of fractional shares, however, will be taxable. Shareholders should consult their tax advisors with respect to U.S. federal, state, local and non-U.S. tax consequences of the Vectrus spin-off.
As of September 8, 2014, Exelis has approximately 188 million shares of common stock outstanding. Based on the one-to-eighteen distribution ratio for the spin-off, approximately 10 million shares of Vectrus common stock will be distributed to Exelis shareholders
The completion of the distribution is subject to the satisfaction or waiver of certain other conditions described in the information statement included in the Vectrus Registration Statement on Form 10 and in the agreements filed as exhibits to the Vectrus Registration Statement on Form 10. Exelis and Vectrus expect all the conditions to the distribution to be satisfied on or before the distribution date.
• How will shares of Exelis and Vectrus common stock be listed and traded?
• Will there be an analyst day or investor information session for Vectrus?
Following completion of the spin-off, both companies will be listed on the New York Stock Exchange. Exelis shares will continue to trade under the ticker symbol “XLS,” while Vectrus shares will trade under the symbol “VEC.” Exelis expects that on or about September 16, 2014, shares of Vectrus will begin trading on a “when issued” basis under the symbol “VEC WI.” Concurrently, “ex distribution” trading in Exelis shares under the symbol “XLS WI” will commence alongside “regular way” trading for Exelis shares. Vectrus will begin “regular way” trading on September 29, 2014, at which time “regular way” trading in Exelis shares will reflect the distribution of the Vectrus shares.
Exelis shareholders who sell their shares of Exelis common stock in the “regular way” market on or before the distribution date will also be selling their right to receive the distribution of shares of Vectrus common stock. Shareholders are encouraged to consult with their financial advisors regarding the specific implications of selling Exelis common stock.
The distribution does not require shareholder approval, nor is any shareholder action or payment necessary to receive shares through the distribution of Vectrus common stock in the spin-off. Prior to the distribution date, the information statement will be available to all shareholders of Exelis common stock as of the record date. The information statement will include information regarding the procedures by which the distribution will be effected and other details of the transaction. The information statement will be available on the Securities and Exchange Commission’s website
• Who is the distribution agent, transfer agent and registrar for Vectrus common stock?
The distribution agent, transfer agent, and registrar for Vectrus common stock will be Computershare Trust Company, N.A. For questions relating to the transfer or mechanics of the stock distribution, shareholders may contact Computershare Trust Company, N.A., via phone at 1-888-847-8927 or +1-781-575-4756, or online at www.computershare.com/investor
. If shares are held by a bank, broker or other nominee, shareholders should contact that institution directly.
Exelis will host an investor information session for Vectrus on September 19, 2014 from 9:00AM EDT to 11:30AM EDT. Future Vectrus Chief Executive Officer, Ken Hunzeker, future Vectrus Chief Operating Officer, Ted Wright, and future Vectrus Chief Financial Officer, Matthew Klein, along with other members of the Vectrus senior management team will present a financial and strategy overview of Vectrus. This investor event may be monitored live by webcast at investors.exelisinc.com.
• Who will serve on the board of directors and in senior management positions for Vectrus?
Key management and members of the board of directors of Vectrus have also been selected. These individuals will officially assume their responsibilities upon completion of the spin-off transaction, expected to take place on September 27, 2014. Biographical information on members of the board of directors and key management can be found in the Vectrus Registration Statement on Form 10 filed with the SEC
Members of the Vectrus board of directors will include:
• Louis J. Giuliano, Non-Executive Chairman
• Bradford J. Boston
• Mary L. Howell
• Kenneth W. Hunzeker
• William F. Murdy
• Melvin F. Parker
• Eric M. Pillmore
• Stephen L. Waechter
• Phillip C. Widman
Key members of Vectrus management will include:
• Kenneth W. Hunzeker, Chief Executive Officer and President
• Theodore R. Wright, Executive Vice President and Chief Operating Officer
• Matthew M. Klein, Senior Vice President and Chief Financial Officer
• Michele L. Tyler, Senior Vice President, Chief Legal Officer and Corporate Secretary
• Francis A. Peloso, Senior Vice President and Chief Human Resources Officer
• Janet L. Oliver, Senior Vice President, Business Development
• Kelvin R. Coppock, Senior Vice President, Contracts
• Charles A. Anderson, Senior Vice President, Programs
• Will Vectrus continue to be headquartered in Colorado Springs?
Yes, Vectrus headquarters will be located in Colorado Springs, Colo.
• What is the meaning behind the name, "Vectrus?"
Vectrus is a blended name derived from the words Vector and Trust. Vector represents strong forward direction, while Trust represents the essence of the new company’s commitment to its customers.
Media and Investor Contacts
• Exelis Investors: Katy Herr, firstname.lastname@example.org
• Exelis Media: B.J. Talley, email@example.com