Symantec to sell Veritas for $8 billion to focus on security software
By Abhirup Roy and Lehar Maan
(Reuters) - Norton antivirus software maker Symantec Corp has agreed to sell its data storage unit, Veritas, for $8 billion to a group led by Carlyle Group LP as it seeks cash to turn around its core security software business.
The deal, the biggest U.S. leveraged buyout this year, will give Symantec much-needed funds to compete in the cyber security market with companies such as Microsoft Corp, Intel Corp and Kaspersky Labs.
Shares of Symantec, which also reported weak quarterly results on Tuesday, fell as much as 6 percent.
Symantec has been facing headwinds as weak PC sales hurt demand for its security software, which comes bundled with computers. Demand for antivirus software has also fallen as users turn to advanced products for protection against sophisticated cyber attacks.
"Now they really get a new lease on life in terms of focusing on their core security DNA as the Veritas storage piece has been a massive black cloud on the Symantec story for a decade," FBR Capital Markets analyst Daniel Ives said.
Symantec is expected to use the proceeds to make inexpensive acquisitions as lofty valuations leave few security companies within its reach.
"If you think about potential acquisition candidates, those will be names like Proofpoint, Qualis, FortiNet Inc as well as a host of private companies," Ives said.
Symantec has long stayed away from network security products, which protect large amounts of data from online threats. Continued...