Symantec the maker of Norton the antivirus software will split and become two individual companies that will be publicly traded. One will focus on security, while the other will focus on storage and backup. The split likely will make the two companies more attractive to investors.
The decision by Symantec follows a recent trend of businesses to split in an effort to increase share prices. Symantec has forced out two CEO in the past 2 years and its financial and stock performance lagged behind many other makers of software.
The deal will reverse its long troubled acquisition of $13.5 billion nearly a decade ago of Veritas a software maker.
The slowing down of sales in the PC sector has hurt Symantec’s security sales, while the slower demand for its date and storage management software diminished Veritas’ value, which before was considered a cash cow when purchased.
The breakup was announced Thursday and comes during a year of the spinoff. Over 60 companies should complete spinoffs this year. That number is the most spinoffs for any year since 2000.
Potential buyers such as NetApp Inc and Cisco Systems likely will show big interest in each of the two Symantec business, said one industry analyst.
Revenue at Symantec was down by 3% ending at $6.69 billion during its most recently ended fiscal year, as the storage business struggled.
The operating income for the storage unit fell by over 19% ending at $574 million as revenue was off by 4% to just less than $2.48 billion.
Michael Brown is to remain as the CEO of Symantec while the current CFO of Symantec Thomas Seifert will also stay.
The spinoff is expected to be complete before the end of December 2015.
Shares for the new company will be tax-free and distributed to shareholders at Symantec at a ratio that is still not determined.