Intel disclosed in a press release and conference call that it will spin off its PSG business unit (Programmable Solutions Group) as a standalone business beginning in 2024 with plans for an IPO in 2-3 years. As a reminder, Intel Acquired Altera in December 2015 for $16.7 Billion and at a valuation of 7.2x EV/Sales at the time of acquisition announcement. Intel’s strategic rationale for the Altera business heavily revolved around the data center segment. With the planned spin off, Intel hopes the business can better capture opportunities as a standalone entity across other end-markets including industrial, automotive, aerospace and defense sectors.
Intel disclosed that the PSG business had $2.9 billion in revenues (TTM as of Q2 2023), however the company expects a normalized run rate of ~$2 billion. The company is targeting Gross Margin and Operating Margin in the mid 60s and mid 30s percent respectively. Intel did not disclose what percent of the business is on Intel Foundry, but the company expects to disclose additional details in 2024.