ITT to broaden portfolio in high-growth defense technology markets with EDO acquisition

* Strategic acquisition accelerates ITT’s plan to grow core, add adjacencies
* Complementary technologies aligned with transformational needs of the military
* Leadership team well positioned to implement smooth integration

White Plains, N.Y. – ITT Corporation (NYSE: ITT) and EDO Corporation (NYSE: EDO), a global aerospace and defense company, have reached a definitive agreement for ITT to purchase all outstanding shares of EDO for $56 per share in cash. Including approximately $120 million of net debt and the anticipated conversion of convertible notes, this transaction values EDO at $1.7 billion. The transaction is expected to be neutral to ITT’s earnings per share in 2008, and accretive thereafter.

“This combination is all about growth and demonstrates our disciplined approach to creating value for our shareholders by expanding from our strong core businesses and entering attractive adjacent markets,” said Steve Loranger, chairman, president and chief executive officer of ITT. “ITT’s continued strong overall performance this year gives us the capability to make this key acquisition, which will be a powerful addition to our existing business. EDO’s extremely talented people, complementary technologies, and customer relationships, when joined with ITT’s strong defense team, will enable us to reach new heights in meeting the changing needs of our military and civil customers.”

EDO is a leader in the design and development of advanced systems at the center of the military’s transformation to lighter, faster, and smarter defense capabilities. EDO has grown revenues at a compound annual growth rate of almost 16 percent over the last three years, and is positioned to grow at approximately 60 percent in 2007 to its current-year forecast of approximately $1.15 billion.

“We believe this is an excellent strategic fit and offers shareholders tremendous value,” said EDO Chief Executive Officer James M. Smith. “It substantially increases our business scale and opens new opportunities in defense markets. We expect employees and customers to benefit substantially from the combination of our technology-driven businesses.”

The transaction, which is subject to approval by EDO’s shareholders, as well as customary closing and regulatory conditions, is expected to close in early 2008.

Poised for growth
EDO’s attractive positions in defense electronics add to ITT’s well-established sensing and surveillance capabilities. In tactical communications, ITT’s leading position in battlefield communications is complemented by EDO’s expertise in mobile networking and integration, interference cancellation and antennas. Both companies offer engineering and professional services to a diverse customer base, serving all branches of the military and civil agencies.

“We’re bringing together two successful defense organizations into one team with one mission: To meet the needs of our customers in support of our nation and its allies,” said Steve Gaffney, president of ITT’s defense business. “We are confident in our plan to integrate our businesses and unlock tremendous value, creating opportunity for employees, customers and shareholders.”

Plays to mutual strengths
The combination capitalizes on ITT’s and EDO’s mutual strengths. By leveraging the diversified portfolios of both companies, the transaction positions ITT to play an important role on some of the U.S. military’s vital transformational initiatives, such as the Joint Strike Fighter, the Navy’s Littoral Combat Ship, counter improvised explosive device (IED) programs, and the Coast Guard Deepwater programs.

Gaffney added, “This transaction combines ITT’s and EDO’s technology prowess, customer relationships, and proven operational capabilities to scale mission-critical military programs and create new markets for our technologies.”

In connection with the transaction, Lazard LLC and UBS Investment Bank are acting as financial advisors to ITT, and Simpson Thacher & Bartlett LLP is legal counsel. Citigroup is acting as financial advisor, and Debevoise & Plimpton LLP is legal counsel to EDO.