SAIC to Split Into Two Public Companies

August 30, 2012

McLean-based Science Applications International said Thursday it plans to split itself into two public companies, taking a major step to unwind a strategy that attempted to more tightly integrate its historically independent units.

The decision comes just months after SAIC appointed its fourth chief executive, retired Air Force Gen. John P. Jumper, with a mandate to reenergize the business.

SAIC was historically known as one of the most entrepreneurial of contractors. Founded by a physicist who led the business for more than three decades, SAIC’s units operated autonomously, and managers were encouraged to pursue their own work.

But Walter P. Havenstein, the previous chief executive, moved the company toward a more integrated approach, arguing that the government’s focus on large contracting programs favored companies that could deploy a wide range of skills. The company struggled under the strategy, watching its profit and revenue decline.

SAIC said it plans to separate into two parts by the end of next year. A roughly $4 billion-a-year services business is to focus on areas such as systems engineering and technical assistance, financial analysis and program office support.

An estimated $7 billion-a-year IT company — which SAIC is calling a “solutions” business — will focus on science and technology for the national security, engineering and health sectors. Communications and intelligence systems as well as electronic warfare and cybersecurity programs would be a part of the offerings.

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