Next Potential M&A and Activist Targets, Cash-Rich Tech Companies, Study by The Edge and Deloitte

NEW YORK, Jan. 27, 2015 /PRNewswire/ -- Since the days of Y2K, a new study of US Spinoffs by global advisors, The Edge Consulting Group and Deloitte, reveals that the US Technology sector has seen ex-parent companies perform significantly better than the Spinoff companies they have spun-off and separately listed on the market to investors.

Technology stocks have been in the limelight for the last year and have been drawing a lot of attention from shareholders. Even witnessing more corporate activism that has resulted in Spinoffs of big technology companies like eBay Inc., Hewlett-Packard Company and Symantec Corp.

eBay announced the separation of its mobile payments service 'PayPal' from its online marketplace and enterprise businesses in September 2014 which was then followed by the announcement by Hewlett-Packard on October 6, 2014 to demerge its PC and printer businesses from its enterprise division. A few days later, October 9, 2014, leading tech player Symantec Corp outlined its plan to Spinoff its data storage business from its security business (i.e. Information Management away from its Consumer Security & Enterprise segments).

Amongst the announced Tech Spinoffs above, all three companies were predicted by The Edge Group. Speaking to The Edge's CEO, Jim Osman, "we believed that these three technology companies could primarily carve themselves into pieces to boost value; considering the fact that pure focused businesses lead to higher trading multiples creating shareholder value. Our analysis has identified over 20 tech companies globally that could follow."

Of the announced Spinoffs in 2014, The Edge believes HP makes a good investment case as the split of the personal-computer and printer businesses (to be known as HP Inc.) can result in the release of the trapped value as it has very limited synergies with its enterprise segment (new name Hewlett-Packard Enterprise). "Another angle to the HP situation is a potential EMC Corp & HP merger, considering the presence of activist investor Elliott Management in EMC Corp, who's been pushing for a Spinoff of VMware or to pursue merger opportunities, also the presence of activist investor, Relational Investors, who possess a 1.4% stake in HP," added Osman.

To enquire or access The Edge's research, visit www.edgecgroup.com or via Twitter @edgecgroup

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SOURCE The Edge Consulting Group

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