Canadian tech specialist BlackBerry (formerly known as Research in Motion) will separate parts of its business, and seek an IPO for one subsidiary next year.
BlackBerry confirmed its intention on Wednesday to separate its business units, as part of its ‘Project Imperium Update.’
It comes after BlackBerry in May this year had announced a review of its strategic options, to help it consider “various strategic alternatives to drive enhanced shareholder value. These alternatives include, but are not limited to, the possible separation of one or more of BlackBerry’s businesses.”
That sale came after its prior deal to sell them to Catapult IP Innovations Inc for $600m fell through, as the deal took longer than usual to close.
But now BlackBerry’s board of directors has determined that “separating the Internet of Things (IoT) and cybersecurity business units into two independently-operated entities is the optimal strategic direction for BlackBerry.”
BlackBerry also stated that main objective of the separation is to pursue a subsidiary initial public offering (IPO) for the IoT business in the first half of 2024.
BlackBerry said that it believes that a separately-traded IoT subsidiary will enable shareholders to more clearly evaluate the performance and future potential of BlackBerry’s principal businesses on a standalone basis, while allowing each business to pursue its own distinct strategy and capital allocation policy.
“The Board and management believe that separating our principal businesses will improve our ability to create value for all our stakeholders,” said John Chen, executive chair & CEO.
BlackBerry chief executive John Chen. Credit: Blackberry
“Both the IoT and Cyber businesses have leading technology and talent and address large and growing market opportunities,” said Chen. “This new proposed structure will further increase both their operational agility and ability to focus on delivering exceptional solutions to their customers.”
Waterloo, Ontario-based BlackBerry is a Canadian tech giant that was founded in 1984 and built pagers.
It went public in 1997 and its Qwerty physical keyboards on its smartphones ensured BlackBerry devices became the must have device for businessmen, politicians (including former President Barack Obama) and legions of fans in the early 2000s.
But BlackBerry, like Nokia at the time, was caught by napping by the arrival of the Apple iPhone in 2007. Its battle with Apple (and Android) intensified over the next five years, and it struggled to maintain a grip on its core enterprise market.
Last week, Blackberry reported its second-quarter results and posted total revenue of $132 million, down from $168 million a year earlier. It also posted a net loss of $42m, down from a net loss of $54m in the same year-ago period.
IoT revenue was $49 million, while cybersecurity revenue came in at $79 million.