BlackBerry, a smartphone manufacturer-turned-software company, has announced it plans to separate its portfolio into two independent entities: One for its cybersecurity business and one for its IoT software division.

The primary goal of the separation is to take the IoT business public next year, BlackBerry stated, adding that the decision follows a strategic review of its portfolio. The company believes splitting its business will allow shareholders to clearly evaluate the performance and future potential of each business while also allowing them to pursue separate strategies and capital allocations.

BlackBerry’s IoT division develops embedded connectivity and operating system solutions for vehicles, medical devices, wearables, and more. IoT accounted for USD 49 million of the firm’s fiscal second quarter, compared to USD 79 million from cybersecurity.

BlackBerry shares were up nearly 5% in late trading following the IPO news.

Analyst QuickTake : BlackBerry initiated “Project Imperium,” a strategic review of its portfolio, in May 2023, citing concerns about financial performance. The firm sold legacy patents related to its smartphone business the previous year. In August 2023, reports surfaced that BlackBerry had received a takeover bid from PE firm Veritas Capital.