Security software firm Symantec to sell Veritas data storage division for $8bn (£5.1bn)
Symantec will sell its Veritas data storage business to Carlyle Group for $8 billion (£5.1bn) in cash, as the security software company looks to refocus its efforts on competing with its rivals such as Kaspersky and Intel.
Shares fell almost six percent after the announcement on Tuesday, following Symantec’s average quarterly results. The company reported revenues of $1.5 billion (£960m), down 14 percent year-over-year.
“This transaction strengthens our financial foundation, paving the way for Symantec to grow its security business and increase its lead as the world’s largest cybersecurity company,” said Symantec CEO Michael A. Brown.
The deal works like this – Symantec will pocket around $6.3 billion (£4.04bn) in cash, with the board authorising a $1.5 billion (£960m) increase to the firm’s existing share repurchase program, bringing the total to $2.6 billion (£1.67bn), with $2 billion (£1.28bn) expected to be returned to shareholders over the 18 month period following the close of the transaction in January 2016.
Veritas sells products that help customers with managing the growth and explosion of data management costs with structured and unstructured data and data governance.
“With a strong product pipeline of more than a dozen enterprise security products on track to be released this year, Symantec is now focused on extending its lead as the world’s largest cybersecurity company,” said Brown.
As for Veritas, gerneral manager John Gannon said the now independent company will “continue to provide next-generation information management solutions to serve the world’s largest and most complex environments”.
TechWeekEurope spoke to Veritas in July, when EMEA senior vice president Matt Ellard said: “It’s not a change in strategy, but it’s the only way think we could execute our information management strategy and security strategy is to have two separate companies, as the market just hasn’t converged as we thought it would.”
Both Veritas and Symantec were refusing to comment on a sale even then, despite persistent rumours about a sale to Carlyle Group.
But the new owners are understandably hopeful, with Veritas potentially eyeing up a market worth £12 billion. Carlyle managing directors Patrick McCarter and Cam Dyer said: “Veritas is a market innovator with global scale, an iconic brand, and significant growth potential.”