NEW YORK-Harris Corp. announced it is repositioning itself to become a pure communications equipment company and will spin off its Lanier Worldwide subsidiary to its stockholders, creating two separate companies-communications and office equipment.
Harris’ near-term actions to reposition itself as an exclusive communications equipment company include:
Realigning the commercial and government business into one company with six divisions, each focused on specific communications markets.
Actively pursing acquisitions, alliances and partnerships to expand Harris’ current market position.
Eliminating the company’s sector organization level.
Streamlining the overhead structure, including cutting 300 to 400 staff positions, which is expected to result in savings of $20 million to $30 million.
Selling the power semiconductor operation, including fabrication and assembly facilities in Pennsylvania, Ohio, Ireland and Malaysia.
Following these actions, Harris said it will provide only communications equipment, systems and support services-concentrating on the wireless, broadcast, government systems and network support markets.
The company said it plans to add to its current line of systems and services in such areas as Internet protocol-based broadband wireless access systems, point-to-point microwave products and video compression products.
The Lanier spin-off will take the form of a tax-free stock dividend of Lanier stock and is expected to take four to six months to complete upon final approval. Atlanta-based Lanier supplies copier, fax and dictation products and has about 10,000 employees in more than 1,600 sales offices around the world.
“The spinoff will heighten management’s focus, provide them with greater access to capital to achieve their growth initiatives and allow the investment community to measure Lanier’s performance relative to its peers,” said Phillip W. Farmer, chairman and chief executive officer of Harris.
Related to the spinoff, Standard & Poor’s placed its single “A-” corporate credit, senior debt and bank loan rating of Harris on CreditWatch.
Standard & Poor’s said that “although the realignment will permit improved focus and may enhance the companies’ access to the equity markets, Harris and Lanier will both be much less diversified businesses and more exposed to fluctuations in their target markets.”
