LSI to Spin Off Storage Unit

LSI Logic(LSI Quote) is going to spin off its storage systems businesses in the first half of this year in an initial public offering valued at $250 million.

According to a registration statement filed this week with the Securities and Exchange Commission, the storage systems business contributes roughly 25% of the chipmaker's total revenue. In 2003, the Milpitas, Calif.-based company reported sales of $1.69 billion.

The company will retain a controlling interest in LSI Logic Storage Systems and will also retain its storage components business, which accounts for about 36% of overall revenue.

LSI entered the storage business in 1998 with the $800 million acquisition of Symbios.

The company expects to actually make the offering in the next four months, but it has not yet priced the shares or said how many will be available.

Morgan Stanley, Goldman Sachs, Lehman Brothers and Wachovia Securities will underwrite the IPO, the company said.

LSI shares dipped 4 cents, or 0.4%, to $10.42 on Friday.