Everett-based industrial technology conglomerate Fortive is considering spinning off its precision-technology unit, known as Newco, in a planned tax-free spinoff that would create two separate, publicly traded companies.
Fortive aims to complete the spin-off in the fourth quarter of 2025, subject to certain conditions being satisfied.
Upon completion, each company will have a focused business model and customized investment and capital allocation strategies. NewCo will be comprised of the same brands that currently operate within the Precision Technologies division and will be positioned to pursue organic growth investments and explore selective M&A opportunities.
“Over the past eight years, our deep focus on innovation has built a more durable, more growth-oriented company,” said James Rico, president and CEO of Fortive, in a press statement. “Our unique culture, rooted in our strong Fortive business system, has been critical to the values we have promoted during this time. Today’s announcement marks the next step in Fortive’s evolution. Once the spin-off is complete, Fortive will be better positioned to accelerate growth and continue to increase earnings and free cash flow with an increased focus on recurring revenue and software businesses. Similarly, our precision technologies business will thrive as an independent, public company focused on the key long-term growth trends that are driving technological advancements around the world. We are confident that this plan best positions each company for the future and will deliver enhanced value for all stakeholders.”
Following the spin-off, Mr. Rico will step down from his roles as president, CEO and a director of Fortive. Upon his retirement, Olumide Soroye, current president and CEO of Fortive’s Intelligent Operations Solutions division, will be appointed as Fortive’s president, CEO and director.
In other executive changes, Tami Newcomb, currently president and CEO of Fortive’s Precision Technologies and Advanced Healthcare Solutions business, will become president and CEO of Nucor, and Chuck McLaughlin will retire as CFO by the end of the first quarter of 2025.