TO FOCUS IS TO SUCCEED Through the spin-off of the Henley Group this past spring, said Gene Barron, manager of corporate finance at Allied Signal Corp, his company succeeded in divesting all its unwanted businesses "in one fell swoop" .Allied Signal retained a 30% interest in the group -- a hodgepodge of 35 different businesses -- whiel shareholders received the remaining 70% of the new company in the form of one Henley share for every four Allied shares. By thus removing all the businesses from its balance sheet at once rather than shopping each individually, noted Barron, Allied Signal achieved the same result with less time and effort while bringing additional value to shareholders.
The Henley spin-off, Barron explained, is part of a strategy that Allied Corp began to implement in 1979 when it decided to emphasize three core areas: aerospace and electronics, engineering materails, and automotive equipment. The emphasis was in line with the company's plan to move out of commodity-oriented businesses -- where price is dictated by market forces beyond management's control -- into technology, where price is a function of the value added. "We wanted more control over our own destiny," said Barron.