Canadian technology company BlackBerry said on Wednesday it would spin off its Internet of Things (IoT) and cybersecurity business units and plan an initial public offering of its IoT unit in the next fiscal year. BlackBerry joins a number of companies that have spun off business units in recent years, favoring leaner corporate structures to help investors better evaluate their separate businesses.
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Earlier this week, packaged food giant Kellogg Co. completed its spinoff. Healthcare giant Johnson & Johnson (JNJ.N) and industrial conglomerate General Electric Co (GE.N) have also spun off some of their units.
"Both the Internet of Things and Networks businesses...capture large and growing market opportunities." BlackBerry CEO John Chen said: "This new proposed architecture will further enhance their operational flexibility and ability to focus on delivering superior solutions."
U.S.-listed shares of Waterloo, Ontario-based BlackBerry rose more than 4% in after-hours trading. The company's shares have fallen more than 18% since Reuters reported in August that private equity firm Veritas Capital had made an offer to buy the company.
BlackBerry said in May that it would consider strategic options for its business portfolio, which could include spinning off one or more businesses.
BlackBerry shut down its smartphone business last year and has since been trying to sell patents related to mobile devices. The company went public in 1997 and quickly became popular for its ubiquitous business smartphones.
Last week, the company announced its second-quarter financial results, with total revenue of $132 million, down from $168 million in the same period last year, with Internet of Things business revenue of $49 million and cybersecurity revenue of $79 million.