Symantec Plans to Split

                The well-known American technology company has announced its upcoming plans to split into two separate publicly traded entities. Symantec is best known for its security software which will become the main focus of one of the new firms. The second Symantec company will shift its focus towards information management. This opportunity has arisen at a time of what many people speculate to be a slowing market and presents a unique opportunity for Symantec to appeal to an increasingly bearish group of investors.

                With a continuously increasing presence in the tech market sector it is necessary for companies to become increasingly market specific. This was a big part of Symantec’s decision to split and have each company increase focus on the distinct strategy that pertains to the security and information management industries. Along with the recent slow in market growth has come a drop in demand for computer sales which in turn has slowed Symantec’s security revenue. The combination of lagging behind other leading security software companies and failing to establish a strong presence in the mobile security industry has left Symantec with few options to re-establish its market presence.

                Based off the declining performance of Symantec over the past few years they are finally starting to show investors that they are taking initiative. This split follows a strong trend in 2014 of companies either doing a full split or spinning off certain sectors into smaller more industry focused industries. In fact this year alone over 60 different spinoffs have occurred, with Hewlett-Packard and Symantec being some of the bigger names in the technology sector. The company hopes to have the split complete by December of 2015 and will re-distribute shares of the new data management company tax-free to current Symantec shareholders.

                On top of separating into more industry specific development Symantec hopes that its security firm will be able to focus more on cash flows while its new data management firm will rely more on increasing revenues. Even though this move has negated basically a decade long expansion effort by the company it has been decided after an extensive review that such a move is necessary. The company shares were up after the announcement of the split yesterday (10/8/14) about 3.5% and have seen a 2.4% decline today at the end of trading.

                However even with share price volatility company executives and board members seem confident that the split will be a success. Symantec’s current CEO, Michael Brown, will remain as chief of the security’s firm with Thomas Seifert at his side as Chief Financial Officer. John Gannon, who joined Symantec in 2012, will be the manager of the new data management firm while Don Rath will join him as CFO. Even with the slump in PC sales Symantec believes that this split will be beneficial in helping fix their recent leg in revenue growth. By allowing capital resources to be allocated more specifically to both firms steps can be taken to increase growth and expansion.

http://www.cnbc.com/id/102076149

http://www.marketwatch.com/story/symantec-plans-to-split-company-into-two-2014-10-09