8-K: Ralliant Corporation Completes Spin-off from Fortive, Launches as Independent Publicly Traded Company on NYSE

Ralliant Corporation has successfully completed its separation from Fortive Corporation, launching as an independent, publicly traded company on the New York Stock Exchange under the ticker symbol RAL, and announcing a $200 million share repurchase authorization.

Summary

• Ralliant Corporation has completed its separation from Fortive Corporation, becoming an independent, publicly traded company, with its common stock (RAL) beginning trading on the New York Stock Exchange on June 30, 2025.
• Fortive shareholders of record as of June 16, 2025, received one share of Ralliant common stock for every three shares of Fortive common stock held, with approximately 112,990,276 shares distributed.
• Ralliant is a global technology company focused on precision instruments and highly engineered products, operating in two segments: Test and Measurement, and Sensors and Safety Systems.
• The company incurred approximately $1.15 billion in new senior unsecured delayed draw term loan facilities, with proceeds used to fund a cash distribution to Fortive as partial consideration for asset transfers.
• Ralliant's Board of Directors approved a share repurchase authorization of up to $200 million of its common stock, with no expiration date.
• For the three-month period ended March 28, 2025, Ralliant reported sales of $481.8 million, an 11.0% decrease year-over-year, driven by an 8.9% core revenue decline and 1.1% unfavorable foreign currency exchange rates.
• Net earnings for Q1 2025 were $63.9 million (historical) and $51.0 million (pro forma), with operating profit margin at 15.3%, down from 26.1% in Q1 2024.
• For the year ended December 31, 2024, sales were $2,154.7 million (relatively flat year-over-year), with a 4.1% decrease in core revenue, and historical net earnings of $354.6 million (pro forma $303.0 million).
• Adjusted EBITDA for 2024 was $553.2 million (pro forma), and operating profit margin was 21.3%, a decrease of 240 basis points from 2023.
• The company's strategy focuses on growth in Utilities, Defense & Space, and Power Electronics, leveraging its Ralliant Business System (RBS) for continuous improvement and customer-centric innovation.
• Ralliant's management team is led by Tamara Newcombe (President & CEO), Neill Reynolds (CFO), Karen Bick (Chief People Officer), Jonathon Boatman (Chief Legal Officer), and Amir Kazmi (Chief Technology and Growth Officer), with Ganesh Moorthy appointed as Board Chair.

Sentiment

Score: 6

Explanation: The overall sentiment is moderately positive due to the strategic benefits of the spin-off, clear growth strategy, and commitment to shareholder returns (share repurchase). However, this is tempered by recent financial performance showing declines in sales and operating profit margins, and the inherent risks and new debt associated with becoming an independent public company.

Positives

• Completion of the separation from Fortive, creating a focused, independent publicly traded company with its own strategic priorities and capital allocation.
• Ralliant's sharpened strategy targets growth vectors in Utilities, Defense & Space, and Power Electronics, aligned with secular trends in electrification and digitization.
• The company benefits from a strong track record of operational and financial discipline, including top-tier Adjusted EBITDA growth and durable free cash flow.
• The Board of Directors approved a $200 million share repurchase authorization, signaling a commitment to returning capital to shareholders.
• Ralliant possesses extensive proprietary assets, including a portfolio of over 2,200 active patents, enhancing its competitive position.
• The company maintains a long-standing global reputation as a trusted innovation partner to engineers, with a 'By Engineers For Engineers' approach.
• Customer diversification is strong, with no single customer accounting for more than 5% of 2024 revenue and the top 10 accounting for less than 20%.
• The Ralliant Business System (RBS), replicated from Fortive's FBS, is expected to drive continuous improvement, operational efficiency, and accelerated new product development.
• The company is positioned to benefit from favorable secular growth trends in its primary end markets, including semiconductors, diversified electronics, communications, utilities, aero, defense and space, and industrial manufacturing.
• A strong and experienced leadership team has been appointed to guide Ralliant as an independent entity.

Negatives

• Sales for the three-month period ended March 28, 2025, decreased by 11.0% year-over-year, driven by an 8.9% core revenue decline and a 1.1% unfavorable foreign currency exchange rate impact.
• Core revenue volume declined by 10.6% in Q1 2025, primarily in oscilloscopes, precision instruments, and high-power solutions due to demand weakness across all end markets.
• Operating profit margin for Q1 2025 significantly decreased to 15.3% from 26.1% in Q1 2024, largely due to the year-over-year effect of a $63.1 million gain on sale of property recognized in Q1 2024.
• Year-over-year sales for 2024 were relatively flat, with a 4.1% decrease in core revenue.
• Operating profit margins for 2024 decreased by 240 basis points to 21.3% compared to 23.7% in 2023.
• The company incurred approximately $1.15 billion in new indebtedness as part of the separation, which could adversely affect its financial flexibility and ability to meet obligations.
• As a separate, publicly traded company, Ralliant may experience increased costs due to the loss of Fortive's purchasing power and higher expenses for corporate functions previously shared.
• The separation process itself could disrupt Ralliant's operations and divert management's attention.
• There is a risk of not achieving all anticipated benefits of the separation, and the business may be more susceptible to market fluctuations as a less diversified entity.
• Significant restrictions imposed by the tax matters agreement may limit Ralliant's ability to engage in certain desirable capital-raising, strategic, or other corporate transactions.
• Fortive may compete with Ralliant in the future, potentially impacting Ralliant's competitive advantage.

Risks

• Conditions in the global economy, the markets we serve, and the financial markets may adversely affect our business and financial results.
• Trade relations between the United States and other countries, including the imposition of new or increased tariffs, could have a material adverse effect on our business and financial results.
• Our growth could suffer if the markets into which we sell our products and services decline, do not grow as anticipated, or experience cyclicality.
• We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce prices for our products and services.
• Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.
• Changes in industry standards and governmental regulations may reduce demand for our products or services or increase our expenses.
• Our reputation, ability to do business, and financial results may be impaired by improper conduct by any of our employees, agents, or business partners.
• Any inability to consummate acquisitions at our anticipated rate and at appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price.
• Our acquisition of businesses, investments, joint ventures and other strategic relationships could negatively impact our financial results.
• The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities.
• Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial results.
• Our operations, products, and services expose us to the risk of environmental, health and safety liabilities, costs, and violations that could adversely affect our reputation and financial results.
• Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial results and our business, including our reputation.
• Climate change, or legal or regulatory measures to address climate change, may negatively affect us.
• International economic, political, legal, compliance and business factors could negatively affect our financial results.
• Changes in U.S. GAAP could adversely affect our reported financial results and may require significant changes to our internal accounting systems and processes.
• We may be required to recognize impairment charges for our goodwill and other intangible assets.
• Foreign currency exchange rates, including the volatility thereof, may adversely affect our financial results.
• Changes in our effective tax rates or exposure to additional tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.
• We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our financial results.
• If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights.
• Third parties may claim that we are infringing or misappropriating their intellectual property rights, and we could suffer significant litigation expenses, losses, or licensing expenses or be prevented from selling products or services.
• Disruptions in, or breaches in security of, our information technology systems have adversely affected, and in the future could adversely affect, our business.
• We may use artificial intelligence in our business and in our products, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
• Defects and unanticipated use or inadequate disclosure with respect to our products (including software) or services could adversely affect our business, reputation and financial results.
• Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key distributors and other channel partners could adversely affect our financial results.
• Our financial results are subject to fluctuations in the cost and availability of commodities or components that we use in our operations.
• If we cannot adjust our manufacturing capacity, supply chain management or the purchases required for our manufacturing activities to reflect changes in market conditions, customer demand and supply chain disruptions, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services could cause production interruptions, delays and inefficiencies.
• Our restructuring activities could have long-term adverse effects on our business.
• Work stoppages, works council campaigns, and other labor disputes could adversely impact our productivity and results of operations.
• If we suffer loss to our facilities, supply chains, distribution systems, or information technology systems due to catastrophe or other events, our operations could be seriously harmed.
• Our ability to attract, develop, and retain senior leaders and other key employees is critical to our success.
• We have no history of operating as a separate, publicly traded company, and our historical and pro forma financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.
• As a separate, publicly traded company, we may not enjoy the same benefits that we did as a part of Fortive.
• The unaudited pro forma combined financial results included in this information statement are presented for informational purposes only and may not be an indication of our financial condition or results of operations in the future.
• We expect that Fortive and its directors and officers will have limited liability to us or you for breach of fiduciary duty.
• Our rebranding initiative will involve substantial costs and may not be favorably received by our customers, business partners, or investors.
• Our customers, prospective customers, suppliers or other companies with whom we conduct business may conclude that our financial stability as a separate, publicly traded company is insufficient to satisfy their requirements for doing or continuing to do business with them.
• Potential indemnification liabilities to Fortive pursuant to the separation agreement could materially and adversely affect our businesses, financial condition, results of operations and cash flows.
• In connection with the separation into two public companies, each of Fortive and Ralliant will indemnify each other for certain liabilities. If we are required to pay under these indemnities to Fortive, our financial results could be negatively impacted. In addition, there can be no assurance that the Fortive indemnities will be sufficient to insure us against the full amount of liabilities for which Fortive will be allocated responsibility, or that Fortives ability to satisfy its indemnification obligation will not be impaired in the future.
• If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, or if certain internal restructuring transactions do not qualify as transactions that are generally tax-free for applicable tax purposes, we, as well as Fortive and Fortives shareholders, could incur significant U.S. federal income tax liabilities and, in certain circumstances, we could be required to indemnify Fortive for material amounts of taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement.
• We may be affected by significant restrictions following the distribution, including on our ability to engage in certain desirable capital-raising, strategic or other corporate transactions, in order to avoid triggering significant tax-related liabilities.
• After the distribution, certain of our executive officers and directors may have actual or potential conflicts of interest because of their equity interest in Fortive.
• Fortive may compete with us.
• We may not achieve some or all of the expected benefits of the separation, and the separation may adversely affect our businesses.
• We may have received better terms from unaffiliated third parties than the terms we will receive in our agreements with Fortive.
• We or Fortive may fail to perform under various transaction agreements that will be executed as part of the separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.
• Our inability to resolve favorably any disputes that arise between us and Fortive with respect to our past and ongoing relationships may adversely affect our operating results.
• Fortives plan to separate into two independent, publicly traded companies is subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated timeline, or at all, and will involve significant time and expense, which could disrupt or adversely affect our business.
• Challenges in the commercial and credit environment may adversely affect the expected benefits of the separation, the expected plans or anticipated timeline to complete the separation, and our future access to capital on favorable terms.
• As of the date of this information statement, we expect to have outstanding indebtedness at the closing of the distribution of approximately $1.15 billion and the ability to incur an additional $150 million of indebtedness under the Term Facilities and $750 million of indebtedness under the Revolving Facility that we expect to enter into, and in the future we may incur additional indebtedness. This indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends.
• We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
• We may be held liable to Fortive if we fail to perform certain services under the transition services agreement, and the performance of such services may negatively impact our business and operations.
• Following the distribution, we will be dependent on Fortive to provide us with certain transition services, which may not be sufficient to meet our needs, and we may have difficulty finding replacement services or be required to pay increased costs to replace these services after our transition services agreement with Fortive expires.
• Certain non-U.S. entities or assets that are part of our separation from Fortive may not be transferred to us prior to the distribution or at all.
• The transfer to us of certain contracts, permits and other assets and rights may require the consents or approvals of, or provide other rights to, third parties and governmental authorities. If such consents or approvals are not obtained, we may not be entitled to the benefit of such contracts, permits and other assets and rights, which could increase our expenses or otherwise harm our business and financial performance.
• Until the distribution occurs, the Fortive board of directors has sole and absolute discretion to change the terms of the separation and distribution in ways that may be unfavorable to us.
• We cannot be certain that an active trading market for our common stock will develop or be sustained after the separation, and following the separation, the stock price of our common stock may fluctuate significantly.
• There may be substantial and rapid changes in our shareholder base, which may cause our stock price to fluctuate significantly.
• A significant number of shares of our common stock are or will be eligible for future sale, which may cause the market price of our common stock to decline.
• If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.
• The obligations associated with being a public company will require significant resources and management attention.
• The market price of shares of our common stock may be volatile, which could cause the value of your investment to decline.
• We cannot guarantee the payment of dividends on our common stock, or the timing or amount of any such dividends.
• If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline.
• Your percentage ownership in us may be diluted in the future.
• Certain provisions in our amended and restated certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock.
• Our amended and restated certificate of incorporation will designate the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders. Our amended and restated certificate of incorporation will further designate the federal district courts of the United States of America as the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. These forum selection provisions could discourage lawsuits against us and our directors and officers.
• The combined post-separation value of one share of Fortive common stock and one-third of a share of Ralliant common stock may not equal or exceed the pre-distribution value of one share of Fortive common stock.

Future Outlook

Ralliant expects to leverage its free cash flow generation to prioritize returning capital to shareholders and selectively pursuing tuck-in acquisitions aligned with its core domain expertise and secular growth strategy. The company will pursue a sharpened strategy to win in growth vectors aligned to secular trends in Utilities, Defense & Space, and Power Electronics, and aims to drive continuous improvement and customer-centric innovation through its Ralliant Business System (RBS). Ralliant anticipates favorable secular growth trends in electrification and digitization to propel its future growth, while also expecting to incur incremental costs as an autonomous entity, with recurring costs starting at the spin-off and one-time costs over the subsequent 12-24 months.

Management Comments

• "As we begin our next chapter as an independent company, we are well-positioned as a global leader in mission-critical precision technologies trusted by over 90,000 customers. We have a sharpened strategy to win in growth vectors aligned to secular trends in Utilities, Defense & Space, and Power Electronics and to continue to deepen our stronghold positions. With a track record of operational and financial discipline, and our commitment to innovation and efficiency enabled by the Ralliant Business System, we are ready to deliver long-term value for our shareholders, customers, and employees." Tamara Newcombe, President and Chief Executive Officer.
• "Ralliant has a strong track record of delivering top-tier Adjusted EBITDA growth and durable free cash flow. We will take a disciplined approach to capital deployment, with an expected prioritization of organic reinvestment, capital return to shareholders, and selective execution of tuck-in acquisitions aligned with our growth vectors. We are grateful to the Ralliant and Fortive teams for their dedication to realizing this milestone, and we are excited to capture the many opportunities ahead." Neill Reynolds, Chief Financial Officer.
• "Given their expertise, strategic and operational achievements, and passion for FBS, I, together with the other members of our Board, have the utmost confidence that Olumide and Tamis leadership at their respective companies will deliver long-term value for stakeholders." James A. Lico, President and Chief Executive Officer, Fortive Corporation.

Industry Context

Ralliant primarily operates in the Semiconductor, Diversified Electronics, Communications, Utilities, Aero, Defense and Space, and Industrial Manufacturing end markets. These markets are characterized as large, diverse, and poised for growth driven by sustained tailwinds in electrification and digitization. Key trends include the increasing demand for next-generation semiconductors, the electrification of mobility, factories, homes, and digital health, exponential growth in data from advanced computing and networking technologies, the growing need for power and efficient energy management, global defense modernization, space exploration, and the rise of industrial automation and digitization of manufacturing workflows. Management estimates the total potential commercial market in these relevant end markets to be approximately $46 billion as of December 2024, with Ralliant's total potential addressable market at approximately $26 billion and its serviceable market at approximately $16 billion.

Comparison to Industry Standards

• Ralliant believes its solutions have supported many of mankind's greatest advances in electronics over the past more than 70 years.
• Ralliant believes its solutions have 99.99% reliability and have enabled over 1,500 successful, life-saving emergency egress escape system initiations.
• Ralliant consistently ranks as a leading provider of control solutions for industrial automation and hygienic instrumentation for food and beverage processing, and possesses industry-leading expertise in monitoring critical environments with its pressure and level sensing solutions.
• In the Test and Measurement segment, main competitors include Keysight Technologies, Rohde & Schwarz, Ametek, and Teledyne Technologies.
• In the Sensors and Safety Systems segment, main competitors include Esco Technologies, Ensign-Bickford Aerospace & Defense, Endress+Hauser, ifm Efector, and Brooks Instrument.
• Through innovation and disciplined execution, Ralliant has delivered low-single digit plus (LSD+) compounded annual core revenue growth over the last five years.

Management Changes

Corporate Governance

Legal Proceedings

• Subject to a variety of litigation and other legal and regulatory proceedings incidental to our business (or the business operations of previously owned entities), including claims for damages arising out of the use of our products and services, claims relating to intellectual property matters, employment matters, tax matters, commercial disputes, disputes with our suppliers or vendors, competition and sales and trading practices, environmental matters, personal injury, insurance coverage, and acquisition or divestiture-related matters, as well as regulatory investigations or enforcement.
• May become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties, or indemnities provided in connection with divested businesses.
• Received notification from the United States Environmental Protection Agency, and from state and non-U.S. environmental agencies, that conditions at certain sites where we and others previously disposed of hazardous wastes and/or of which we are or were property owners require clean-up and other possible remedial action, including sites where we have been identified as a potentially responsible party under United States federal and state environmental laws.

Related Party Transactions

• Entered into a Separation and Distribution Agreement, Employee Matters Agreement, Tax Matters Agreement, Transition Services Agreement, Intellectual Property Matters Agreement, FBS License Agreement, and Fort Solutions License Agreement with Fortive Corporation.
• Made a cash distribution of approximately $1.15 billion to Fortive as partial consideration for the contribution of assets and liabilities in connection with the separation.
• All intercompany loans and advances between Fortive (and its non-Ralliant subsidiaries) and Ralliant (and its subsidiaries) will be terminated upon completion of the separation.
• Ralliant was allocated corporate overhead and shared expenses from Fortive, including general management, IT, HR, legal, finance, benefits, and risk management, based on methodologies like relative share of revenues, headcount, or functional spend.
• Ralliant was allocated expenses related to certain insurance programs and medical insurance programs administered by Fortive.
• Certain Ralliant employees participate in Fortive's nonqualified deferred compensation programs, with deferred amounts being unfunded, unsecured obligations allocated to Ralliant.
• Sold approximately $1.4 million of products and services to Microchip Technology Incorporated (former company of Ganesh Moorthy) in 2024 on an arms-length basis.
• Sold a commercial building to Analog Devices, Inc. (former company of Anelise Sacks) for approximately $90 million in 2024, and had other commercial dealings including lease payments and utility reimbursements.
• Sold approximately $1.1 million of products and services to, and purchased approximately $13 thousand from, Applied Industrial Technologies, Inc. (company of Neil Schrimsher) in 2024 on an arms-length basis.
• Sold approximately $110,000 of products and services to Wolfspeed, Inc. (former company of Neill Reynolds) in 2024 on an arms-length basis.

Stakeholder Impact

• Shareholders: Received one share of Ralliant common stock for every three shares of Fortive common stock held, in a distribution intended to be tax-free (except for fractional shares). The separation aims to create enhanced long-term value through focused business models. A $200 million share repurchase authorization was approved, indicating a commitment to returning capital. However, shareholders may experience stock price volatility and changes in the shareholder base post-separation.
• Employees: Ralliant employees will transition from Fortive's benefit plans to Ralliant's own benefit plans. New executive compensation plans and equity awards are being established. Non-hire and non-solicitation covenants are in place between Ralliant and Fortive to manage talent transitions.
• Customers: Ralliant aims to continue delivering customer-centric innovation and improving product quality, delivery, and efficiency through the application of the Ralliant Business System (RBS).
• Suppliers/Creditors: Ralliant has incurred new indebtedness of approximately $1.15 billion. As a standalone entity, Ralliant's procurement terms and relationships with suppliers may change, potentially impacting costs and supply chain dynamics.

Next Steps

• Ralliant's common stock will begin trading on the New York Stock Exchange under the ticker symbol RAL on June 30, 2025.
• Ralliant expects to leverage its free cash flow generation to focus on returning capital to shareholders and selectively pursuing tuck-in acquisitions aligned with its core domain expertise and secular growth strategy.
• Ralliant will pursue a sharpened strategy to win in growth vectors aligned to secular trends in Utilities, Defense & Space, and Power Electronics, and continue to deepen stronghold positions.
• Ralliant will continue to rigorously apply the Ralliant Business System (RBS) across all areas of the business to drive operational efficiency, reduce waste, and accelerate new product development.
• Ralliant's compensation committee will identify a compensation peer group and determine the executive compensation programs.
• Ralliant will adopt a policy relating to the timing of equity-based compensation grants.
• Ralliant will implement a stock ownership policy for its executive officers and directors.
• Ralliant will have recoupment and clawback terms for compensation and policies prohibiting pledging and hedging of shares.
• Ralliant will adopt the Ralliant Executive Deferred Incentive Plan (Ralliant EDIP) and a severance plan similar to Fortive's.
• Ralliant's Board is expected to adopt a written policy on related person transactions and Corporate Governance Guidelines.
• The Audit Committee will adopt procedures for complaints regarding accounting, internal accounting controls, and auditing matters.
• Ralliant will provide disclosure on its website regarding corporate governance.
• Ralliant will continue to monitor for further corporate tax legislative developments and changes to the Pillar Two framework.

Key Dates

Recommendation

Keywords

Precision Technologies, Test and Measurement, Sensors and Safety Systems, Spin-off, Fortive, Ralliant, Industrial Automation, Electrification, Digitization, Semiconductors, Power Electronics, AI Data Centers, Share Repurchase, Capital Allocation, Corporate Governance, SEC Filing