Canadian technology company, BlackBerry, has announced plans to separate its internet of things (IoT) and cybersecurity business units, as it looks to pursue a subsidiary initial public offering for the IoT business in the next fiscal year.
This move follows a trend among companies in recent years, as they opt for a more streamlined corporate structure to enable investors to assess their individual businesses more effectively.
Notable examples include the recent spinoff of the packaged food giant formerly known as Kellogg, as well as the spinoffs by health-care giant Johnson & Johnson and industrial conglomerate General Electric.
BlackBerry CEO, John Chen, stated that both the IoT and Cyber businesses have significant potential in a rapidly expanding market. The proposed restructuring aims to enhance their operational flexibility and enable them to concentrate on delivering exceptional solutions.
Following this announcement, BlackBerry’s US-listed shares saw a rise of over 4% in after-hours trading. It is worth noting that the shares had previously experienced an 18% decline after reports of a buyout offer from Veritas Capital.
In May, BlackBerry had already expressed its intention to explore strategic options, including the potential separation of certain businesses within its portfolio.
In an effort to focus on other ventures, the company discontinued its smartphones business last year and has been actively seeking buyers for its patents associated with mobile devices.
After going public in 1997, Blacberry quickly gained popularity for its widely used business smartphones, which were favored by executives, politicians, and a large fan base during the early 2000s.
In its recent second quarter report, the company disclosed a total revenue of $132 million, a decrease from $168 million in the previous year. Revenue from IoT reached $49 million, while cybersecurity revenue amounted to $79 million.
