Workflow solutions conglomerate Fortive Corporation (Fortive) is spinning off its Precision Technologies segment.

This will create two separate, publicly-traded companies, each with focused business models and distinct approaches to investment and capital allocation.

The company said the move will allow Fortive to concentrate on its software and health care business units.

“Today’s announcement marks the next step forward in Fortive’s evolution,” Fortive’s President and CEO James Lico said in a Sept. 4 news release. “Once the spin-off is complete, Fortive will be more focused on recurring revenue and software businesses, and better positioned to accelerate growth and consistently grow earnings and free cash flow. Similarly, our Precision Technologies business will thrive as a standalone public company, focused on key secular growth trends powering the world’s technology advancements.”

Fortive Corp. had 2023 total revenue of $6.07 billion, with net earnings of $866 million.

Fortive will retain its Intelligent Operating Solutions and Advanced Healthcare Solutions segments, with a portfolio consisting of about 50% recurring revenue. The company’s strategy post-spin-off will emphasize mergers and acquisitions that enhance growth, free cash flow and recurring revenue, while maintaining a balance between acquisitions and share repurchases.

Meanwhile, the Precision Technologies business — to be temporarily called NewCo — will concentrate on mission-critical technologies such as test and measurement, specialty sensors and aerospace and defense subsystems. It plans to focus on organic growth, shareholder returns and strategic mergers and acquisitions.

In addition to the spin-off, Fortive announced a leadership transition. James Lico will retire and Olumide Soroye — currently heading Fortive’s Intelligent Operating Solutions segment — will take over as President and CEO. Tami Newcombe will become the CEO of NewCo, while CFO Chuck McLaughlin is also set to retire by the end of 1Q25.

The spin-off is expected to be completed in the fourth quarter of 2025.

Previously, Fortive spun-off from Danaher Corporation in 2016.