Symantec sells off backup business Veritas for billions

After months of seeking buyers, Symantec announced Tuesday it is selling Veritas to a group of investment firms for $8 billion in cash.

The investors are led by the Carlyle Group, followed by GIC Private Limited, a sovereign wealth fund established by the government of Singapore, and other expected co-investors.

Bloomberg had reported in July that Symantec was nearing a deal with Carlyle Group, although the price offered for the information management business hovered between $7 billion and $8 billion at the time.  According to its report, it had already been shopping for potential buyers for several months, but interest was limited due to a tax burden that would result from the split.

The deal is expected to close by January 1, 2016 and was unanimously approved by Symantec’s board of directors.  The company estimates that it would receive approximately $6.3 billion in net cash proceeds.

Since purchasing Veritas in 2005 for $13.5 billion (the second most expensive software acquisition of all time), Symantec has done little to integrate or grow the information management business, resulting in low revenue growth.

In preparation for the sale, Symantec both rebranded Veritas in January and implemented changes in its senior leadership, namely bringing former Symantec Canada GM Sean Forkan in as the new vice-president of Veritas’ central U.S. region and Canada.

The Carlyle Group, a multinational asset manager with investments in industries including technology and business services, telecommunications and media, announced separately that Bill Coleman and Bill Krause will become CEO and Chairman, respectively, of Veritas upon closing of the transaction.

In October 2014, prior to talks of a sale, Symantec had announced it would split from Veritas.  Around the same time, HP had announced it would split into two companies while eBay Inc. also unveiled plans to spin off PayPal.

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Jim Love, Chief Content Officer, IT World Canada

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Dave Yin
Dave Yin
Digital Staff Writer at Computer Dealer News, covering Canada's IT channel.

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