Symantec palms Veritas off on private equity group in $8bn mega-sale
Carlyle Group slurps up storage firm – just like we told you would happen
As suspected, Symantec has offloaded its Veritas storage business to the Carlyle Group for $8bn - way off the $13.5bn paid for the company in 2004.
The Carlyle Group has contributions towards the purchase from GIC, Singapore’s sovereign wealth fund, and other expected co-investors. Symantec expects to receive approximately $6.3bn in net cash proceeds from the sale. It has authorised a $1.5bn increase in its share re-purchase program and will maintain a dividend program.
Overall, Symantec expects to return about 120 per cent of its after-tax domestic cash proceeds from the sale to its shareholders. Its president and CEO Michael Brown had a canned quote ready: ”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.”
John Gannon is a Symantec EVP and currently the Veritas general manager. However the Carlyle Group has announced separately that Bill Coleman, the founder, chairman, and CEO of BEA Systems, and Bill Krause will become CEO and chairman, respectively, of Veritas upon closing of the transaction.
Krause was previously chairman, president and CEO of 3Com. Both Krauze and Coleman are partners at VC firms in Silicon Valley.
Carlyle managing directors Patrick McCarter and Cam Dyer also visited the quote cannery and said: “Veritas is a market innovator with global scale, an iconic brand, and significant growth potential. Bill Coleman is a proven leader whose strategic vision and strong execution skills will leverage Veritas’ new-found position as a private, stand-alone company to grow the firm and provide customers an integrated information management solution.”
Coleman was quoted as saying: “Our mission is to maintain our industry leadership position while accelerating growth by re-energising our product platform and by capitalising on emerging and next generation technology as the data centre evolves.”
A wave of restructuring is poised to wash over the storage industry, as well as other parts of IT. The HP split is coming soon. Imation looks to be heading for a likely shopping exercise, and EMC is set to do something about its Federation structure.
The big guys in this business are not delivering the growth and shareholder value goods, and lots of eager startup puppies are snapping at their heels. With the Veritas domino falling, things are starting to happen to resolve the growing tensions in the industry. ®