* ITT Exelis seeks buyer for Mission Systems assets-sources
* Assets for sale have $1 bln-$1.5 bln in annual revenues
* Proceeds could go to pay down pensions, debt-sources
* Leonard Green looks to sell consulting firm Scitor-sources
By Soyoung Kim
NEW YORK, May 7 U.S. defense contractor ITT
Exelis is seeking a buyer for its division that provides
logistics, security and other support for the U.S. military and
other government agencies, according to people familiar with the
ITT Exelis -- a defense business that ITT Corp spun
off last year -- has hired boutique investment bank Stone Key
Partners to advise on a potential sale of its lower-margin
services assets, which have annual sales in the $1 billion to
$1.5 billion range, the people said.
The assets being considered for sale are under ITT Exelis'
Mission Systems division, one of the company's four segments and
which had 2010 revenue of $1.52 billion -- or roughly a quarter
of the company's total revenues -- they said.
The division provides maintenance, facilities support,
engineering, logistics and security operations for military and
government customers in some 20 countries around the world,
The business has operating margins that are lower than
double-digit or high single-digit operating margins in ITT
Exelis' core defense electronics and product-oriented divisions.
An ITT Exelis spokesman said the company's policy is not to
comment on any corporate development activities. Stone Key
representatives were not available for comment.
The company could use the proceeds from a sale to fund its
pension obligations or pay down debt, or to make acquisitions to
complement its more profitable defense electronics and product
businesses, the sources said.
SCITOR FOR SALE
Separately, private equity firm Leonard Green & Partners LP
is looking to sell Scitor Corp, a provider of consulting
services for government defense programs, as well as corporate
customers, according to the same people familiar with the
The potential sale comes nearly five years after the Los
Angeles-based Leonard Green acquired Scitor for an undisclosed
amount. While the size of the business is unclear, some of the
sources valued Scitor in the range of $600 million to $800
Lazard Ltd is advising on the process and has
reached out to potential buyers, the sources said.
Representatives for Leonard Green and Lazard did not respond
to requests for comment.
Herndon, Virginia-based Scitor, with a strong presence in
the space and classified information services sector, o ffers
systems engineering, financial and management consulting,
information services and other services for national priority
It is not clear if the largest defense contractors would be
interested in bidding for Scitor, partly because of concerns
that the company's government consulting services could create
organizational conflicts of interest, some of the sources said.
Many defense companies have long offered advice to
government agencies on programs they end up bidding for,
creating a conflict of interest. That prompted the U.S. Congress
to pass a law that requires the Department of Defense to tighten
rules on potential conflicts at such companies.