L-3 to Spin Off Some Government Services Into New Company; Strianese Comments

Michael Strianese, L-3 Communications

L-3 Communications (NYSE: LLL) will spin off a new, publicly-traded government services company to its shareholders called Engility.

Engility will provide systems engineering, technical assistance, training and operational support services and employ approximately 10, 000 workers.

Tony Smeraglinolo, current executive vice president of L-3’s services group, will be its chief executive officer.

L-3 expects to complete the move in the first half of 2012, subject to customary closing conditions. It will not be subject to a shareholder vote.

L-3 will retain its cyber, intelligence and security solutions businesses under a new national security solutions segment run by Steve Kantor, current president of L-3’s services group.

L-3 expects Engility to have 2011 pro forma sales of approximately $2.0 billion and operating income of approximately $179 million

“Our Board and management team reached this strategic decision following a comprehensive, year-long review across L-3’s entire business to address changing industry dynamics, ” said Michael T. Strianese, chairman, president and CEO of L-3. “By creating an independent leader in government services, both L-3 and Engility will be better aligned and positioned with evolving customer priorities to grow their respective market leadership positions.”

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