IBM to Spin Off Managed Infrastructure Services Unit Into New Public Company
October 08 2020 - 6:21AM
Dow Jones News
By Dave Sebastian
International Business Machines Corp. said it will spin off its
managed infrastructure services unit, currently part of its global
technology services division, into a new public company, as part of
its hybrid cloud strategy.
Shares rose 3.2% in premarket trading.
The new company, which IBM will name at a later date, will offer
hosting and network services, services management, infrastructure
mode and migration and management of multi-cloud environments, IBM
said Thursday.
IBM said the separation, expected to be tax-free to
shareholders, would simplify its operations. The two entities are
expected to initially pay a combined quarterly dividend of at least
IBM's per-share dividend before the spin off, IBM said. The
transaction is expected to close by the end of 2021.
The managed infrastructure services unit has relationships with
4,600 clients in 115 countries, operating in what IBM sees as a
$500 billion market opportunity. The spun off unit will focus on
artificial intelligence and automation, helping enterprises make
their infrastructures more efficient, IBM said. IBM said the new
company will be able to partner across all cloud vendors and add
investment, meaning more opportunity for profit growth and cash
generation.
The company Thursday also posted preliminary third-quarter
earnings from continuing operations of $1.89 a share, or $2.58 a
share on an adjusted basis, on revenue of $17.6 billion.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
October 08, 2020 07:06 ET (11:06 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
International Business M... (NYSE:IBM)
Historical Stock Chart
From Apr 2024 to May 2024
International Business M... (NYSE:IBM)
Historical Stock Chart
From May 2023 to May 2024
