General Electric announced plans Thursday spin off its GE Digital business and establish an independent internet of things company, built around several GE Digital technologies.

GE also said it is simultaneously selling a majority stake in Service Max to private equity shop Silver Lake. Service Max is a software business GE Digital acquired for $915 million in November 2016.

"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," GE chairman and CEO Larry Culp said in a statement.

GE also announced that GE Digital CEO Bill Ruh has left the company and said it will "conduct an internal and external search to identify the CEO for this new independent company."

GE said the new internet of things company will have its a new brand, as well its own equity structure and independent board of directors. More details will be announced in the first quarter, it said.

GE shares jumped 7.3 percent in trading Thursday to close at $7.20 a share. The stock largely moved higher after J.P. Morgan analyst Stephen Tusa, a longtime GE bear, upgraded his rating to neutral from underweight. He said the embattled industrial giant now has a more "balanced risk reward at current levels."