General Electric Co. said it will launch a new industrial internet of things company consisting of its digital and software businesses, as it also announced the sale of its majority stake in software firm ServiceMax Inc.
The new entity, which is set to start with $1.2 billion in annual software revenue, will have its own brand, equity structure and board, GE said.
"As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers, and generate new value for shareholders," said GE CEO Lawrence Culp Jr.
GE will reveal more details in the first quarter of 2019 regarding the digital business, which will focus on the power, renewables, aviation, oil and gas, food and beverage, chemicals, consumer packaged goods and mining industries.
The industrial conglomerate also announced that GE Digital CEO Bill Ruh has left the company, and that it will now conduct an internal and external search for a new CEO of the business spinoff.
Separately, GE said it agreed that GE Digital would sell a majority stake in ServiceMax, a provider of cloud-based field service management software, to private equity firm Silver Lake Partners.
Under the deal, GE will retain 10% of ServiceMax, which it acquired for $915 million in 2016.
The companies did not disclose financial terms of the deal, which they expect to close in early 2019.
Morgan Stanley & Co. LLC served as financial adviser to Silver Lake and Skadden Arps Slate Meagher & Flom LLP provided legal counsel.
GE's stock was up 10.88% as of 10:35 a.m. ET, trading at $7.44 per share.