SAIC plans spinoff

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MCLEAN, Va., Aug. 31 (UPI) -- Science Applications International Corp. announced plans to separate into two independent companies in the second half of the next fiscal year.

The spinoff endeavor follows a comprehensive strategic review by SAIC's board of directors.

The newly formed company would focus on government technical services and enterprise information technology, SAIC said.

"In this next step of our strategic plan we configure ourselves for the future." said John Jumper, SAIC chairman and chief executive officer. "Our two new companies will be designed so that their businesses can be more differentiated and more competitive in their own space. More importantly, that addressable space will expand for each as we eliminate the burden of organizational conflicts of interest.

"This affords both companies an excellent opportunity to combine optimized cost structures, unrestricted access to their respective markets and the leveraging of decades of SAIC's scientific and engineering excellence to unleash the growth and value we can deliver to our customers, employees and shareholders."

SAIC said the proposed separation is intended to take the form of a tax-free spinoff to SAIC stockholders of 100 percent of the shares of a newly formed company and that the spinoff wouldn't require shareholder approval.

"We feel that SAIC is now well-positioned to leverage its strong market position in both the solutions and services businesses, including several high growth markets, and it is time to enact the next step in our strategy," Chief Operating Officer Stu Shea said. "Competitive conditions warrant a more efficient cost structure, and increased competition requires us to operate in unconstrained environments, free of OCI and other impediments.

"We believe this separation will create value for our stockholders by unlocking the full growth potential of SAIC."