Waltham, Massachusetts -- Thermo Electron Corp., the biggest maker of measurement instruments, will split into three companies and sell units with $1.2 billion in sales to streamline a structure that confused some investors.
The company said it will concentrate on its instruments business and spin off its Thermo Fibertek fiber-based composite-products unit and a new medical-products company to shareholders.Thermo Electron said in May it would reduce its number of publicly traded units from 23. The company forms companies based on the technology it develops and sells minority stakes to the public. Investors have complained the company was too complex and called for Thermo Electron to sharpen its focus. Its shares fell 11 percent last year.
"Shareholders who have struggled in the past with the company's complexity should benefit from the simplified structure," Chief Executive Richard Syron said in a statement.
The company plans to sell its Thermo Cardiosystems, Trex Medical, Thermo TerraTech, Thermo Coleman, Peek, NuTemp, Thermo Trilogy and Peter Brotherhood businesses. It doesn't anticipate any losses from the sales.
The reorganization and asset sales are expected to be completed by early next year. There aren't expected to be "significant" job cuts, Thermo Electron said.
The Waltham, Massachusetts-based company's shares rose 5/16 to 16 9/16 in midmorning trading.
Thermo Electron said in May it would reduce the number of publicly traded units, called "spin-outs," to 11. The company has already sold businesses with $150 million in revenue.
Syron, former chairman of the American Stock Exchange, was hired in March to run Thermo Electron as investors fretted about declining earnings and a lack of direction. Syron replaced George Hatsopoulos, a Greek immigrant who founded the company with his brother John in 1956.
Proceeds from the sales will be used by Thermo Electron for acquisitions and product development. The instrument business had revenue of about $2.3 billion in 1999.
Thermo Fibertek had sales of about $225 million last year, while its businesses had medical products revenue of about $335 million.
In November, the company hired McKinsey & Co. to evaluate its strategy. J.P. Morgan & Co. and the Beacon Group Capital Services LLC also advised Thermo Electron.