Sat, Oct 11, 2014 - Page 15 News List

Symantec scheduled to split security, information management divisions

NY Times News Service

Symantec Corp on Thursday became the latest technology company to announce plans to split in two.

The company, which has a market value of more than US$16 billion, is scheduled to become two publicly traded companies — one focused on security and the other on information management.

The announcement comes after one by Hewlett-Packard Co (HP) on Monday that it planned to spin off its personal computer and printer business into a new company called HP Inc.

What remains will be known as Hewlett-Packard Enterprise and is set to focus on business clients.

Only a week before HP’s announcement, eBay Inc said it would turn its PayPal unit into a new publicly traded company, bowing to the wishes of activist billionaire investor Carl Icahn.

“We really are in two businesses, and there are a lot of disruptive trends in each,” Michael Brown, chief executive of Symantec, which is based in Mountain View, California, said in an interview.

Unlike HP, which has been burdened by the slow growing market for printers and PCs, Symantec said both of its businesses were still growing fast.

“We don’t have a business that’s old and one that’s new,” Brown said. “These are both industry leaders in growing markets.”

The security business, which is what Symantec is best known for, provides products and services to governments, companies and individuals, and is the market leader.

Revenue from the security business was about US$4.2 billion in the last fiscal year.

The information management business creates backup software, and had revenue of about US$2.5 billion last year.

The split will be tax free to shareholders, reducing the likelihood of a taxable competing bid from a bigger rival for either unit.

No activist investor appeared to be pressing Symantec for a split.

ValueAct, a hedge fund, had taken a stake this year but has sold its shares.

Brown said no activist was pressuring management behind the scenes, either.

More splits may follow.

EMC Corp, a big data storage company, is under pressure from the activist hedge fund Elliott Management to break apart, notably with a full spinoff of VMWare, a virtualization company of which it owns 20 percent.

Elliott on Wednesday outlined thoughts for a separation and EMC said it was in talks with the hedge fund, but did not rebut any of the ideas it had put forward.

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