The corporate world has come down with a serious case of the splits.
Security software maker Symantec is the latest company to announce plans to break itself up, as the Mountain View, Ca.-based outfit said Thursday afternoon it will split off its data storage business from its cyber security arm. In doing so, Symantec is following in the footsteps of eBay (EBAY) and Hewlett-Packard (HPQ), both of which recently announced split-offs of their own.
“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,”Symantec CEO Michael Brown said in a statement. “It has become clear that winning in both security and information management requires distinct strategies, focused investments and go-to market innovation.”
Symantec (SYMC) plans to spin the data storage unit off to its shareholders as its own separate, publicly-traded company in a transaction expected to be completed by the end of December. While the company said it expects the process will result in unspecified restructuring costs, Brown said that the split will help create new opportunities for growth while offering greater value to Symantec’s shareholders.
Speculation that a split was in the works at Symantec started on Tuesday, when reports surfaced saying an announcement could be on the way for the company known best for its Norton antivirus software. The news comes seven months after Symantec fired former CEO Steve Bennett and replaced him with Brown, the former chief executive at Quantum, who became the third CEO in as many years for the company as it has struggled to keep apace with evolving trends in the security software market.
Brown will continue to lead Symantec while John Gannon, Quantum’s former president and COO, will become general manager of the newly-formed data storage company. The new company will mainly be built from the remnants of data storage company Veritas, which Symantec paid $10 billion to acquire in 2005. Symantec said the unit serves three-quarters of the companies in the Fortune 500 and pulled in $2.5 billion in revenue during the 2014 fiscal year.
The company added that the split will allow Symantec to grow its security business, which generated $4.2 billion of the company’s total revenue last year. On deck is a new “threat defense gateway,” meant to help combat data breaches and other hacking attacks, that the company plans to introduce by the end of the fiscal year.
Symantec was ranked #378 on the latest Fortune 500 with $6.9 billion in annual revenue. Shares of the company were up 21 cents, or .9%, to $23.65 in after-hours trading following the announcement.
Earlier this week, Hewlett-Packard (HPQ) announced a plan to split its enterprise software and services business from its computer and printer business to create two standalone companies. That news followed eBay’s (EBAY) recent decision to split from its PayPal online payment service after much public prodding from activist investor Carl Icahn.