Spinoff announcements have experienced an upswing recently as several companies have declared their plans to jettison particular business operations to current shareholders and effectively sever ties with their corporate units. According to an examination of S&P Capital IQ data, there have been 66 spinoff announcements to date this year. That tops the full year 2013 count of 57 such corporate actions taken by US companies and the most since 2007 when 87 spinoff plans were disclosed.
But from the perspective of sector activity, the Global Markets Intelligence (GMI) research unit of S&P Capital IQ finds that the information technology sector commands the top rank as sector with the most number of spinoff announcements to date this year with twelve. That the previous two-year total of eleven IT sector spinoffs announced in 2012-13 and is the highest number since 17 information technology companies announced spinoffs plans in 2007. Just since the end of September, four major IT spinoffs have been made public including eBay Inc.’s intention to spin off its PayPal business and Hewlett-Packard Company splitting the company into two publicly traded firms – one focused on enterprise services and the other on printing and PCs. Also, declaring spinoffs were Symantec Corp., which agreed to spin off its Information Management business to shareholders, and Compuware, which agreed to spin off a 82.8% stake Covisint Corp. to shareholders.
With the accelerating trend of spin offs, we await if full year 2014 results push the IT spinoff count to above the 2007 levels and to all-time highs.