Symantec confirms split; forming companies for security, information management

Following a similar move by Hewlett-Packard this week, Symantec confirmed on Thursday that it will indeed split into two companies.
Written by Rachel King, Contributor

Splitting up a flailing company appears to be the new black in the tech world.

Following similar moves by eBay and Hewlett-Packard, Symantec confirmed on Thursday that it will indeed split into two public companies.

The shift follows a unanimous decision by Symantec's Board of Directors as well as murmurs about a potential breakup circulated earlier in the week.

The plan is to divide the Mountain View, Calif.-based company into two brands: one business focused on security and one business focused on information management.

The Information Management business will consist of backup and recovery, archiving, eDiscovery, storage management, and information availability services.

Highlighting $2.5 billion in revenue for the IM unit in fiscal 2014, Symantec aimed to assure shareholders in an announcement that forming "two standalone businesses will allow each entity to maximize its respective growth opportunities and drive greater shareholder value."

The security business will retain consumer and enterprise endpoint security, endpoint management, encryption, mobile, Secure Socket Layer certificates, user authentication, data loss prevention, hosted and managed security, and mail, web and datacenter security services.

Michael Brown will continue as Symantec CEO with Thomas Seifert still onboard as chief financial officer.

John Gannon, president and chief operating officer at Quantum, has been tapped as general manager of the new information management business with Symantec vice president Don Rath as acting CFO.

The information management business spinoff is projected to be completed by the end of December 2015 with the promise of "a tax-free distribution to Symantec shareholders of 100 percent of the IM business in a new, independent, publicly traded stock."

J.P. Morgan Securities LLC has been enlisted as the financial advisor to Symantec through the transition period.

Symantec promised more details would be discussed amid its second quarter call, scheduled to take place after the bell on November 5.

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