Government contractor SAIC to split into two firms
Science Applications International Corp. will be splitting off into two publicly traded companies, according to a statement SAIC released.
One of the new companies will focus on government technical services and information technology, while the other will target what SAIC called “high-growth markets” in national security, engineering and health. The company expects the technical services business to bring in revenues of approximately $4 billion dollars in 2013, whereas revenues estimates for the solutions business stand at $7 billion.
“Our two new companies will be designed so that their businesses can be more differentiated and more competitive in their own space,” SAIC Chairman and CEO John Jumper said. “More importantly, that addressable space will expand for each as we eliminate the burden of organizational conflicts of interest.”
The spinoff was created following a meeting of SAIC’s board of directors, which decided the move would increase shareholder value in both companies. The company said if all the necessary regulatory paperwork and filings go through, the separation should be complete by 2014.
Earlier this summer, SAIC lost a $3.3 billion contract to manage the Defense Department’s Global Information Grid to Lockheed Martin Corp. In September 2011, backup tapes for 4.9 million beneficiaries of TRICARE health care program were stolen from an SAIC employee’s vehicle.