3Com today 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 says.
The move will allow each company to separately focus on growth opportunities in core markets, and will create more value for shareholders, customers and employees, the Santa Clara, Calif. company says.
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 says 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.
Former Netscape CEO James Barksdale, who now is managing partner of the Barksdale Group, will join the new Palm company's board of directors. Other management decisions will be announced before a filing is made with the Securities and Exchange Commission, 3Com says.
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 says. The company 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 as well as Internet-related products and services that let people access and use information in new and innovative ways, the company says.
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 totaled $5.8 billion. 3Com says its Palm business represented about 10% of total 1999 sales.
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