Symantec Corporation (NASDAQ:SYMC) announced the decision of its board of directors to separate its businesses into two independent, publicly-traded companies.
Symantec needs distinct strategies
Michael A. Brown, president and CEO of Symantec Corporation (NASDAQ:SYMC) said the information management (IM) and security businesses of the company have unique market opportunities. The businesses are also facing challenges amid the continued changes in the security and storage industries.
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Brown said, “It has become clear that winning in both security and information management requires distinct strategies, focused investments and go-to-market innovation.”
“Separating Symantec into two, independent publicly traded companies will provide each business the flexibility and focus to drive growth and enhance shareholder value,” emphasized Brown.
Details of the spinoff
Symantec Corporation (NASDAQ:CORP) said one company will focus on the security business, and the other company will concentrate on information management.The board conducted an extensive business review of its strategy and operational structure prior to its decision to pursue separation.
Establishing two standalone businesses would allow each entity to maximize its respective growth opportunities and deliver greater shareholder value, according to Symantec Corporation (NYSE:SYMC).
The company emphasized that the separation enables each standalone company to focus on its unique growth opportunities, R&D investments and go-to-market capabilities. It will also reduce operational complexity, enhance strategic flexibility, pursue partnerships and develop independent M&A strategies.
Symantec Corporation (NASDAQ:SYMC) has a leading position in the security space, and its overall market share is two times its nearest competitor. The security market is expected to reach $38 billion in 2018. Its security business generated $4.2 billion in revenue for the fiscal 2014.
On the other hand, the IM business of Symantec Corporation (NASDAQ:SYMC) is also a market leader, which serves 75% of the Fortune 500 companies. It generated $2.2 billion in revenue for the fiscal 2014. Its appliance products are growing at growth rate of 27% year-over-year, faster than the industry. Its backup products are number one in the industry.
Symantec Corporation (NASDAQ:SYMC) intended to implement the separation in the form of a tax-free distribution of 100% of the IM business to its shareholders through a new, independent and publicly-traded stock.
Michael A. Brown will continue to serve as president and CEO of Symantec Corporation (NASDAQ:SYMC) and Thomas Seifert as CFO.
On the other hand, John Gannon will serve as general manager for the new information management business and Don Rath will serve as its acting CFO.
The company expects to complete the separation by the end of December 2015.