After two other major companies announced similar splits- HP into Hewlett-Packard Enterprise and HP Inc. and PayPal, which split from eBay, the antivirus maker Symantec is about to attempt the same maneuver. Perhaps there is something in the water in Silicon Valley, however, Symantec is hell bent on joining the splitsville club.
On Thursday afternoon, the company announced its decision of splitting into two separate companies which will turn into publicly-traded companies and will focus on different sectors: the first, on security business and the second on information management. Symantec’s decision comes after an extensive business review that showed that a different strategy and structure could maximize growth and shareholder values.
Consequently, the security business will now focus on cyber security services that range from encryption and user authentication products to Norton antivirus software while the second company that will stem out of this split will focus on Symantec’s information management business. During the fiscal year 2014, the former generated $4.2 billion in revenue, while the latter generated $2.5 billion.
“As the security and storage industries continue to change at an accelerating pace, Symantec’s security and IM businesses each face unique market opportunities and challenges. It has become clear that winning in both security and information management requires distinct strategies, focused investments and go-to market innovation,”
said the newly appointed Symantec CEO, Michael Brown.
“Separating Symantec into two, independent publicly traded companies will provide each business the flexibility and focus to drive growth and enhance shareholder value.”
Brown added in a statement made on Thursday afternoon.
Although the new structure should not be a surprise to Wall Street, Symantec shares were halted after news of the split was released. The company did not provide any details as to what the new companies would be called; the only information that was released was that Michael Brown would continue in the position of president and CEO of Symantec while Tomas Seifert would continue as CFO.
According to a news release announcing the split, the transaction should be completed by December 2015, when John Gannon will assume the position of general manager within the new information management business, while Don Rath will become its acting CFO.
Symantec shareholders will not experience any discomfort, as the split is programmed to take the form of a tax-free distribution, where the information management business will go through a new, independent, publicly traded stock.
Symantec’s stock is currently trading for a 1.2% gain and closed its Thursday trading session down 2.4 percent.