Symantec is selling its IM business to an investor consoritum and refocusing on security
Digital security heavyweight Symantec announced this week it would sell its information management business, Veritas, to a group led by The Carlyle Group together with GIC, Singapore’s sovereign wealth fund, for a total of $8.3bn.
The move confirms Symantec will continue to focus on security following the announcement last October that the company would split in two, with its IM business and security business going separate ways.
“Since the Board first announced the separation of Veritas, we have been preparing the company to operate independently and evolving our business strategy, while continuing to deliver industry-leading solutions to our customers. We are thrilled to partner with The Carlyle Group and GIC, which have a strong track record of successfully growing businesses and share our dedication to Veritas’ strategy and success,” said John Gannon, Symantec executive vice president and Veritas general manager.
“Veritas will continue to provide next-generation information management solutions to serve the world’s largest and most complex environments, including multiple cloud deployments, managed services and on-premise infrastructure,” Gannon said.
Symantec expects to receive $6.3bn in cash for Veritas, and has authorized a $1.5bn increase to its existing share repurchase program, bringing the total to $2.6 billion, yielding a total of $8.9bn from the sale. Veritas was originally acquired by Symantec for $13.5bn in 2005.
Michael A. Brown, Symantec president and chief executive said: “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. We believe the agreement with the investors, including The Carlyle Group and GIC, delivers an attractive and certain value for the Veritas business, and is in the best interests of all stakeholders.”
The divestment isn’t terribly surprising giving Symantec’s messaging at the tail end of last year. Upon announcing the company would split Brown said its security and IM businesses each face unique market opportunities and challenges.
“It has become clear that winning in both security and information management requires distinct strategies, focused investments and go-to market innovation,” he said at the time.
Now it seems Symentec is refocusing exclusively on security, and said the sale would give it a much needed cash influx to help it fund both organic and inorganic growth through targeted acquisitions.