MCLEAN, Va., Sept. 9, 2013 /PRNewswire/ -- SAIC, Inc. (NYSE: SAI) today announced that its Board of Directors has approved the separation of its technical, engineering and enterprise information technology services business and declared a pro rata dividend to its stockholders, effective after market close on Friday, September 27, 2013 (the "distribution date"), of all of the shares of SAIC Gemini, Inc., which will hold the spun-off business and be renamed Science Applications International Corporation (Science Applications) in connection with the completion of the separation.
Each SAIC, Inc. (SAIC) stockholder of record as of the close of business on September 19, 2013 (the "record date") will receive, effective as of the distribution date, one share of common stock of Science Applications for every seven shares of common stock of SAIC held as of the record date. The distribution of these shares will be made in book-entry form, which means that no physical share certificates will be issued.
On the distribution date, SAIC will change its name to Leidos Holdings, Inc. On Monday, September 30, 2013, shares of Leidos will begin "regular way" trading on the New York Stock Exchange under the ticker symbol LDOS and shares of Science Applications will begin "regular way" trading on the NYSE under the ticker symbol SAIC.
The Board of Directors of SAIC also approved a one-for-four reverse stock split of Leidos shares, effective immediately after the distribution.In connection with the spin-off, Science Applications will incur approximately $500 million of debt financing. The proceeds of the debt financing will be used to pay a $295 million cash dividend to SAIC immediately prior to the completion of the spin-off. SAIC intends to use the net proceeds it receives from this dividend for general corporate purposes. "SAIC has a proud legacy of solving complex problems, thriving on innovation and working shoulder-to-shoulder with customers," said SAIC Chairman and CEO John Jumper, future Chairman and CEO of Leidos. "For the next chapter, we will take things to the next level – moving forward and launching two great American companies that will continue to serve the best interests of not only our customers and shareholders, but also our communities, our families and our world." "This strategic decision by our board culminates a year of hard work and continued performance by our dedicated employees," said the program executive for the separation, SAIC COO Stu Shea, future President and COO of Leidos. "As we move forward in Leidos, the talent of our team and the passion they have for serving our customers will be the foundation of our future success." Future Science Applications CEO Tony Moraco said that, "As a leading technology integrator, the new SAIC will be a more streamlined organization with greater focus on servicing our customers' critical mission and enterprise IT needs. The spin allows us to eliminate any perception of organizational conflicts of interest, enabling us to pursue a new world of market opportunities with an integrated enterprise approach." Distribution of Science Applications Shares The distribution does not require stockholder approval, and no action or payment is required by SAIC stockholders to receive shares of Science Applications common stock. Stockholders who hold SAIC common stock on the record date, and do not trade the right to receive Science Applications shares (see Pre-Spin Trading of SAIC Common Stock below), will receive a book-entry account statement reflecting their ownership of Science Applications common stock or their brokerage account will be credited with the Science Applications shares. Fractional shares of Science Applications common stock will not be distributed. Instead, fractional shares of Science Applications' common stock will be aggregated and sold in the open market, with the net cash proceeds distributed to those stockholders who would otherwise hold Science Applications fractional shares.