General Electric will establish a new independent Internet of Things (IoT) company from the GE Digital business and several of its technologies, according to the company.
The new company will start with $1.2 billion in yearly software revenue and an established global customer base. It is intended to be a wholly GE-owned, independently run business, but with a new brand and identity. It will have its own equity structure and also its own board of directors.
“As an early leader in IIoT (Industrial Internet of Things), GE has built a strong business with its industrial customers thanks to deep domain knowledge and software expertise,” said GE CEO H. Lawrence Culp. “As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals, deliver greater value for our customers and generate new value for shareholders.”
Also, GE Digital CEO Bill Ruh is leaving to pursue other opportunities, and the company will search both internally and externally for a replacement. GE plans to announce more details about the new venture in the first quarter of 2019.
GE also announced it has agreed to sell a majority stake in ServiceMax, a provider of field service management software, to Silver Lake, a private equity firm that focuses on tech investments. GE acquired ServiceMax in November of 2016 for $915 million. GE will retain a 10 percent equity in ServiceMax.
“ServiceMax has a strong foundation of customers inside and outside the GE customer base,” said Scott Berg, CEO of ServiceMax. “In Silver Lake, we have found a partner with a technology growth mindset and unique expertise in separating companies into standalone businesses. Joining the Silver Lake family will provide the investment we need in continued technology development and market expansion in areas where we have seen significant traction, such as medical devices, construction and manufacturing industries. The new company structure gives us both the flexibility to provide solutions to all industrial manufacturers and the strategic backing of GE to continue to pursue the industrial asset operator markets.”