LSI Logic Moves Toward Storage Division IPO

LSI Logic moved closer to an initial public offering (IPO) for its storage division by announcing a name change for the unit.

LSI Logic Storage Systems revealed Thursday night that it has become Engenio Information Technologies Inc., and the Milpitas, Calif.-based parent company also announced other steps have been completed in preparation of an IPO for the unit.

LSI Logic reports Engenio has expanded its board of directors and that it has filed an application for listing with the New York Stock Exchange to trade under the ticker symbol NGE. The IPO is expected to be completed by mid-year.

“Engenio reflects appropriately upon our heritage of innovation in information storage technology while offering a strong new identity to serve us well in the future,” Engenio CEO Thomas Georgens said in a statement.

In addition to chairman Wilfred Corrigan, the board now includes Georgens; Charles Haggerty, CEO of Le Conte Associates; Douglas Norby, CFO of Tessera
Technologies; Matthew ORourke, business consultant and retired partner of Price Waterhouse LLP; Gregorio Reyes Sr., management consultant and former CEO of Sunward Technologies; and Larry Sonsini, CEO of Wilson Sonsini Goodrich & Rosati.

Morgan Stanley and Goldman, Sachs & Co. are managing the offering. The company’s SEC filing provides for an offering by the storage systems subsidiary of up to $250 million of its common stock.

After the offering is completed, LSI Logic will continue to own the majority of the outstanding common stock of the storage systems company. LSI Logic says its current intention is to distribute to its stockholders by mid-2005 the remaining shares of the storage company in a tax-free transaction. All of the net proceeds from the storage systems IPO are expected to be paid to LSI Logic.

After the separation, LSI Logic’s focus will be on its semiconductor businesses targeted at global consumer, communications, and storage components markets.

The storage systems division took in $426.7 million in revenue last year, earning $15.7 million. Revenues were up 27% over 2002, but earnings were flat. IBM accounted for 51% of the division’s revenues in 2003.

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