Moody's: ITT unchanged

Moody's Investors Service said that ITT Corp.'s announcement that it will acquire EDO Corp. in a transaction that will cost $1.7 billion in the aggregate does not affect its Baa1 long-term or P-2 short term debt ratings.

The outlook is stable.

A closing is expected to take place early in 2008 subject to EDO's shareholders' approval and regulatory approval, the agency said, noting that although the details of the financing of the transaction were not disclosed, ITT said that its financing has been arranged and that it would repatriate $1 billion in cash prior to the closing of the transaction.

Moody's said it noted that the purchase price at 9x 2008 EBITDA appears fully priced and if the EDO acquisition was debt-financed, pro forma debt/EBITDA would rise on a Moody's adjusted basis to about 3.4x from slightly under 2x.

Moody's said that free cash flow generation in 2008 should be strong and expects meaningful debt reduction to occur and share repurchases constrained in 2008.

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