3Com splitting in two, Palm Computing to go public
- — 14 September, 1999 21:49
3Com has announced plans to split the company in two, taking its Palm Computing subsidiary public.
3Com plans to launch the initial public offering (IPO) of Palm Computing by early next year, the company said today in a statement.
The move will allow each company to separately focus on growth opportunities in their core markets, and will create more value for shareholders, customers and employees, the US-based company said.
3Com's Palm Computing subsidiary makes the popular handheld devices Palm III, Palm V and Palm VII. The other part of 3Com's business is focused on networking products such as routers, switches and modems.
Although it didn't say what percentage of Palm Computing would be issued on the stock market, 3Com said the remaining shares will be distributed to 3Com shareholders. 3Com also will license Palm's technology and will continue to support the company's growth.
James Barksdale, the former Netscape Communications chief executive officer who now is managing partner of the Barksdale Group, and Gordon Cambell, president and chairman of Techfarm, will also join the new Palm company's board of directors. Other management decisions will be announced before a filing is made with the US Securities and Exchange Commission, 3Com said.
The newly public Palm Computing will concentrate its efforts on licensing handheld operating systems, making products and services for enterprise computing, wireline and wireless Internet services, portal sites and Palm-branded devices, 3Com said. It also expects to strike a number of new alliances and partnerships.
Meanwhile, 3Com's networking business will concentrate on expanding its networking systems and connectivity businesses. The goal is to create networks, and Internet-related products and services that let people access and use information in new and innovative ways, the company said.
While 3Com's Palm Computing business has shown vigorous growth, its traditional business for networking products has seen less spectacular results. In its 1999 fiscal year, which ended in May, 3Com's sales totalled $US5.8 billion. In today's release, 3Com said its Palm business represented about 10 per cent of total 1999 sales.