LSI Logic to spin off storage division
LSI Logic to spin off storage division
LSI Logic has announced plans to separate its storage systems operations from its mainstream semiconductor business and create an independent storage systems company.
The independent company will be based upon LSI Logic's wholly owned subsidiary, LSI Logic Storage Systems, with an initial public offering (IPO) of the new company in the early part of next year under consideration.
"Our plan is to create an independent storage systems company that unlocks the value and potential of our storage systems business," said Wilfred Corrigan, LSI Logic Chairman and CEO. "We anticipate that a separation will intensify the market focus and strategic direction of the two companies, benefiting customers, investors and employees. The net result will be two companies, one focused on semiconductors and the other on storage systems. Both companies will be financially sound, independently managed and targeted on the growth of their respective markets. Each company will be well positioned to build value for shareholders, customers and employees."
For the third quarter of 2003, LSI Logic Storage Systems' revenues were $104 million (all figures US dollars), or 23 percent of the $450 million reported by LSI Logic. Those results represented the sixth consecutive quarter of year-over-year revenue growth for the storage arm.
"LSI Logic Storage Systems has generated revenue growth and delivered profitability to LSI Logic based on its strong customer engagements, strategic partnerships, market presence, advanced technologies and broad product portfolio," said Bryon Look, LSI Logic Chief Financial Officer. "The revenues of our Storage Systems subsidiary have returned to their peak levels, achieved in 2000."
LSI Logic Storage Systems designs and manufactures modular enterprise storage platforms and storage management software that are delivered to end users through strategic partners. IBM, StorageTek, the Teradata Division of NCR, and SGI are among its partners.
Tom Georgens will be the CEO of the storage systems company. Georgens has served as the president of LSI Logic's Storage Systems subsidiary for the past five years.
"We have expanded and strengthened our customer relations and strategic partnerships," said Georgens. "Based on the global trend toward modular, scalable storage systems and LSI Logic Storage Systems' proven partnership model, we can provide best-in-class solutions to end-market customers."
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