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Symantec selling Veritas to private equity firm – report
Absence of CEO for backup biz suggests buyer will bring their own
Symantec’s soon-to-be-split-off Veritas business is destined for private equity ownership, according to Bloomberg.
The buyer is said to be the Carlyle Group and it will pay something between $7bn and $8bn for a business, which has forecast $2.6bn annual revenues.
It’s been noted for some time that there is no CEO identified for Veritas, whereas the Symantec side of the business has Michael Brown in place.
HP – which is similarly separating itself into two businesses – has its two CEOs identified. Often, a PE buyer of a business will install their own CEO, as is he case with Jonathan Huberman running the Syncplicity business for Skyview Capital.
Symantec bought Veritas for $13.5bn in 2005, so it’s making a rather large loss on the deal, if it takes place.
A sale to PE would raise guaranteed cash, whereas turning Veritas into a publicly treaded business would give it shares, which it would have to sell at a price set by the market over a longish period, so as not to depress the share price.
Veritas has four lines of business:
- Backup and recovery software (NetBackup and Backup Exec)
- Information availability
- Information intelligence – archiving, e-discovery, etc
Most revenue comes from the backup software, where Symantec is a Gartner-anointed big player, along with EMC, IBM and CommVault. Growth is low, however, and new players such as Veeam are growing much faster.
We wrote about Veritas’ strategy yesterday. Whether that strategy would survive under the scrutiny of a new CEO and a PE owner enthusiastically looking for a profitable exit down the road is questionable.
Turning whales into dolphins generally requires a lot of fat to be sliced off, and that's easier done under private ownership than public. ®