Hewlett-Packard (NYSE: HPQ) will split the company into two publicly traded firms by the end of fiscal year 2015– with one company set to specialize in enterprise IT hardware, software and services and the other in personal computers and printers.
The company said Monday that the enterprise hardware and services business will operate as Hewlett-Packard Enterprise and the PC and printing business will operate as HP Inc.
“The decision to separate into two market-leading companies underscores our commitment to [our] turnaround plan, ” said HP CEO Meg Whitman.
“It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders.”
Whitman will serve as president, CEO and board member of Hewlett-Packard Enterprise and Patricia Russo will take the board chairman role there.
Dion Weisler will be president and CEO of HP Inc., where Whitman will also serve as a non-executive chairman.
The company noted that it will distribute shares for both spinoff companies to its stockholders tax-free, following final approval by the HP board of directors.
Goldman Sachs & Co. served as financial adviser and Wachtell, Lipton, Rosen and Katz served as legal adviser for the pending transaction.
The Wall Street Journal, which first reported the move Sunday, said the company wants the move to boost operations for the enterprise technology business and forecasts a different growth profile for the PC and printer business.
According to the Journal, HP has examined the idea of a separation for a few years, such as a proposed spinoff of the PC business in 2011 that did not go through.
Whitman has made several reorganization efforts at the company over the past two years to help address a drop in sales.