Symantec eyeing Veritas for $13bn - report

Data protection on the grandest scale

By Ashlee Vance, 14th December 2004

Customer Success Testimonial: Recovery is Everything

There could be another high profile software merger on the way with rumors circulating today that Symantec will buy Veritas Software for more than $13bn.

Such a deal would create the ultimate data protection vendor. Symantec specializes in anti-virus and network security applications, while Veritas is a major player in the data backup and storage software markets. The combined company would have strong consumer and corporate plays and be able to pull off true laptop to mainframe sales.

Veritas has been mentioned as a frequent acquisition target. Companies such as Sun Microsystems, EMC, Hitachi, IBM and Oracle have been named as possible suitors. Oracle is, of course, doing its best to drive consolidation in the software industry by picking up PeopleSoft and threatening to buy more firms.

Word of the possible merger - first reported by The New York Times - sent Veritas shares up close to 10 per cent, at the time of writing. The software maker started the day with a market cap of more than $10bn. Symantec investors have seen their shares drop more than 12 per cent, at the time of this report, to $28.80.

It would be somewhat surprising to see Veritas agree to an acquisition , given that the company's CEO Gary Bloom has long said he thinks Veritas can grow at a steady pace on its own. Veritas has acquired numerous companies over the past two years, trying to build out its server software portfolio. Veritas pulled in $1.75bn in revenue last year.

Veritas, however, is attractive at the moment as its share price - $27.56 - is well below a 52-week high of $40.68. The company was hammered by investors after some accounting problems became public.

Symantec, by contrast, has seen its share price surge over the past year on the back of solid revenue growth. ®