Symantec may flog off Veritas – but where's the CEO hunt at?
PE sale instead of float on the cards
Symantec is being pressed to sell its Veritas storage unit to private equity instead of floating it as an independent publicly-owned business, according to reports over the weekend.
Symantec intends to split itself into separate security and storage businesses as a way of re-igniting growth for both.
CEO Michael Brown will run the security business but no CEO has been identified for the storage business, though it has been named Veritas Technologies, reflecting Symantec’s purchase of Veritas 10 years ago for $13.5bn.
The purchase proved to be an indigestible lump causing serial revenue growth and career-ending CEO problems at Symantec, with the company burning through three “permanent” CEOs in as many years.
According to people in the know, Veritas, with $2.5bn annual revenue, could be worth $8bn or more to a Private Equity (PE) buyer or group of PE buyers. That is if unspecified but problematical tax issues could be sorted out.
The failure thus far to identify a CEO for the Veritas business indicates that Symantec may indeed, as the reports say, have already approached potential PE buyers when the split was first mooted.
For Symantec, if such a PE buyout took place, its acquisition record would be confirmed to be piss poor, having managed to make an investment of $13.5bn ten years ago now worth up to 41 per cent less. How’s that for shareholder value, bozos?
News of the possible PE buyout sent Symantec’s share price up over the weekend, from just over $24 to $25.6 dollars. The shares peaked at $33.38 in December 2004. ®