SAIC Plans to Split Into Two Companies; Jumper, Shea Comment

John Jumper

The board of directors at SAIC Inc. (NYSE: SAI) has given management approval to formulate a plan to split SAIC into two independent, publicly traded companies.

In its announcement, SAIC said it intends for one company to focus on government technical services and enterprise information technology.

Stu Shea

The other will focus on science and technology solutions in national security, engineering and health.

Such a separation would complete during the second half of fiscal year 2014, the company said.

L-3 Communications (NYSE: LLL) recently completed its spinoff of Engility (NYSE: EGL) into an independent, pure-play professional and technical services provider.

“Our two new companies will be designed so that their businesses can be more differentiated and more competitive in their own space, ” SAIC CEO John Jumper said in the announcement.

“More importantly, that addressable space will expand for each as we eliminate the burden of organizational conflicts of interest, ” Jumper added.

“Competitive conditions warrant a more efficient cost structure, and increased competition requires us to operate in unconstrained environments, free of OCI and other impediments, ” Chief Operating Officer Stu Shea Said.

The technical services business will be a pure-play provider of systems engineering and technical assistance, cost and financial analysis and program office support.

The science and technology business will pursue defense acquisition programs and programs of record in several C4ISR avenues such as maritime ISR, Navy airborne programs, battlespace awareness, maritime domain awareness, electronic warfare and missile warning.

That business will also focus on logistics and readiness with U.S. and international customers.

The company estimates technical services revenues at $4 billion for fiscal year 2012 and science and technology revenues at $7 billion for the same period.

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