Informix Corp. Tuesday announced the completion of a restructuring exercise that will ultimately see the troubled U.S. database and tools vendor split into two independent companies.
The move is designed in part to reassert Informix as a significant player in the database arena. The first of the new companies to be created -- Informix Software -- will focus on that market and endeavor to grow the number of Informix database users, according to an Informix Corp. statement.
The other new company, to be named by the end of this year, will concentrate on providing e-businesses with databases and software related to Web publishing, electronic commerce and business intelligence. Through this subsidiary, Informix Corp., for the first time, will support not only its own databases, but those from its rivals such as IBM Corp., Microsoft Corp., Oracle Corp. and Sybase Inc.
The two companies initially will be wholly-owned Informix Corp. subsidiaries, but the plan is to eventually turn them both into independent, publicly traded entities. Details about how this plan will be carried out will be disclosed by the end of the year, Informix said, as the vendor investigates how to separate the two businesses.
Informix laid the groundwork for its two-way split last month, when it took steps to condense its five business units into two units -- its Database Business Operations and its Solutions Business Operations. [See "Informix's Latest Revamp All About Simplicity," Aug. 10, "Informix to Lay Off Nearly 500 Employees," Aug. 10 and "Informix to Take Q3 Charge, Revamps Organization," Aug. 9.]Jim Foy, senior vice president of Informix's Database Business Operation, becomes the president of Informix Software. His company will employ about 2,300 staff and have its headquarters in Silicon Valley, at one of Informix Corp.'s current locations. The company expects revenue for 2000 to be in the order of US$780 million to $800 million, with anticipated growth for 2001 of about 5 percent, according to the Informix Corp. statement.
Pete Fiore, senior vice president of Informix's Solutions Business Operation, becomes the president of the yet-to-be-named e-business company. The new operation will be based in Westboro, Massachusetts, home of data warehousing specialist Ardent Software Corp., which Informix acquired in March. The e-business firm will employ abound 1,100 staff and expects to report revenue for 2000 of between $120 million and $130 million. It is predicting growth in the order of 80 to 100 percent for 2001 and also hopes to become profitable at that time, Informix Corp. said.
Looking at the new business model, the database business will account for around 85 percent of Informix Corp.'s quarterly revenue of $200 million to $215 million, while the e-business operation will make up the remaining 15 percent. Taking this situation into account, Informix Corp. expects to report an operating loss, excluding restructuring charges, of 5 to 8 cents per diluted share for its third financial quarter due to close Sept. 30, 2000, the company said in the statement. The software vendor is due to report its third-quarter results in the third week of October.
Excluding restructuring costs, Informix Corp. is hoping to break even in the fourth quarter of 2000 and return to profitability in the first quarter of 2001. The company expects to incur transition costs in the first half of 2001 in the range of $15 million to $20 million, up from its prediction of $10 million to $15 million made last month. The change is due to additional staff cuts, Informix said in the statement.
On the plus side, at the end of its third quarter, Informix Corp. expects to be debt-free and to have cash and cash equivalents to the tune of $245 million. The company has bought back 6.4 million shares of its stock since Aug. 14, 2000, the vendor said in the statement.
Informix Tuesday also announced a number of key senior management changes, as well as the relocation of its corporate headquarters from Menlo Park, California, to Westboro, Massachusetts.
Peter Gyenes, Informix Corp. chief executive officer and president, as of Monday, has also become chairman of the company's board of directors. Bob Finocchio, the previous chairman, has resigned. Informix Corp. Chief Financial Officer Yon Yoon Jorden will resign as of Nov. 1, 2000, and be replaced by Jamie Arnold, the company's present vice president of finance and operations for the Americas. Jorden, only in the CFO hot seat since May of this year, will stay with the company until the end of this year to see the upcoming split into two operations come to fruition.
Arnold also becomes the CFO for Informix Software, while Joanne Protano, who joined Informix Corp. from Ardent, becomes the CFO for the e-business company.
Informix, in Westboro, Massachusetts, can be reached via the Internet at http://www.informix.com/.