Everett-based Fortive to spin out its precision technologies business

Everett-based industrial technology company Fortive Corp. (NYSE: FTV) is splitting into two public companies in a move aimed at investors.

On Wednesday, Fortive announced it will spin out its precision technologies business as a yet-to-be-named company. Fortive expects the spinout to complete in the fourth quarter of next year, after which Fortive CEO James Lico will retire.

Olumide Soroye and Tami Newcombe, current Fortive executives, will take the CEO roles at Fortive and the new company, respectively.

"Fortive is really going to be focused on their technology solutions of software and hardware focused on customers in operating environments across industrial and health care markets," Lico said. "The new company will be focused on mission-critical technologies, test measurement, specialty sensors in aerospace and defense."

Lico added that Fortive generally has two types of investors. One group is attracted to the durability of Fortive's software and recurring revenue in health care, according to Lico, while others are attracted to precision technology that is tied to tech markets that can be more volatile. Splitting the company in two will allow investors to back whichever business interests them.

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Fortive itself spun out of the life sciences conglomerate Danaher Corp. in 2016. The company offers a range of health care and industrial technology products and services through more than a dozen subsidiaries. After the spinout, Fortive's business would include services like surgical asset management, gas detection and safety monitoring, while the new company's precision technology business would include services like hygienic sensing and customized motion control components.

Fortive has more than 18,000 employees, of which roughly 10% are based in the Puget Sound region. The company generated $1.55 billion in revenue during the second quarter, up 2% year over year, and it projects revenue of about $6.3 billion for the year.

Lico said Fortive will make up about $4 billion of that revenue, and the new company will make about $2.3 billion. Although he didn't say exactly what the employee breakdown will be between the two companies, he said it should roughly split along that revenue ratio.

The headquarters of the new company remains undetermined for now. Lico said Fortive will remain in Everett, but none of the operations for the new company are based in Washington, so it's unlikely that company's headquarters will be here. The new company will have a name by the time it spins out, he added.

Soroye is president and CEO of Fortive's intelligent operation solutions business, while Newcombe is president and CEO of the company's precision technologies and advanced health care solutions business. Lico said he is focused on the next year rather than retirement, but he plans to spend more time with charities and family.

The separation still needs final approval from the board, financing and regulatory approvals. Lico added the company needs to split some of its IT systems.

"There's a high degree of certainty that this will spin in the fourth quarter of 2025," Lico said.

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