CANADA: Waterloo, Ontario-based technology firm BlackBerry has unveiled plans to divide its Internet of Things (IoT) and cybersecurity business units, with a subsidiary initial public offering (IPO) for the IoT division slated for the next fiscal year.
The move follows a trend among companies in recent years, opting for a leaner corporate structure to enable investors to better assess individual business performances.
This decision comes in the wake of the recent spinoff of packaged food conglomerate Kellogg Co., which has been rebranded, demonstrating a strategic shift. Likewise, healthcare giant Johnson & Johnson and industrial conglomerate General Electric have embarked on similar endeavours, parting ways with certain units.
BlackBerry’s CEO, John Chen, remarked, “Both the IoT and Cyber businesses… address large and growing market opportunities. This new proposed structure will further increase both their operational agility and ability to focus on delivering exceptional solutions.”
Following this announcement, BlackBerry’s U.S.-listed shares surged over 4% in after-hours trading. This uptick follows an 18% dip after reports surfaced in August of a buyout offer from private equity firm Veritas Capital.
BlackBerry had previously disclosed in May its contemplation of strategic options for its diverse portfolio, which included the potential separation of specific businesses. In the preceding year, the company decided to discontinue its smartphone division and has since sought buyers for its legacy patents associated with mobile devices.
Founded in 1997, BlackBerry swiftly gained prominence for its ubiquitous business-oriented smartphones, which were embraced by executives, politicians, and a devoted fanbase in the early 2000s.
In the latest quarterly report released last week, the company disclosed a total revenue of $132 million, a decline from the previous year’s $168 million. The IoT division contributed $49 million, while cybersecurity generated $79 million in revenue.
Also Read: Triple Stabbing Shocks University of Waterloo Campus; Professor and Two Students Injured
