Symantec Corp. said Tuesday that it has agreed to sell its
Veritas data-storage and recovery business to a group of investors
led by private-equity firm Carlyle Group LP for $8 billion in
cash.
Carlyle joined with with GIC, Singapore's sovereign-wealth fund,
and other investors on the deal.
Mountain View, Calif.-based Symantec had been exploring
strategic options for the business as an alternative to its plan to
split into two publicly traded companies. The Wall Street Journal
reported in April that Symantec had contacted private-equity firms
and possible industry bidders about buying Veritas, which Symantec
bought in 2005 in an all-stock deal valued around $13.5
billion.
In a news release, Chief Executive Michael A. Brown said Tuesday
that the sale allows Symantec to focus on growing its security
business.
Symantec, which in the late 1980s pioneered computer security
with its antivirus software, last year announced it would split its
cybersecurity and information-management businesses into two
publicly traded companies. In January, it said the
information-management company would be named Veritas Technologies
Corp.
Veritas provides a suite of information backup and recovery,
storage management, disaster recovery and archiving products.
Symantec expects $6.3 billion in cash proceeds from the sale and
said it has added $1.5 billion to its share-buyback program.
Shares of Symantec, down 10.7% this year, added 0.4% to $23 each
in premarket trading, while Carlyle shares were inactive.
The deal is expected to close by Jan. 1.
Carlyle has named Bill Coleman, the chief executive of software
company Cassatt Corp. and a member of Symantec's board, as CEO of
Veritas. Bill Krause, a Carlyle operating executive focused on
technology and business services, was named chairman.
Separately, Symantec on Tuesday reported worse-than-expected
double-digit declines in revenue and profit in its fiscal first
quarter.
Symantec has struggled to shift its consumer-security business
to subscriptions from one-time license sales.
In all, for the period ended July 3, Symantec posted a profit of
$117 million, or 17 cents a share, compared with a prior-year
profit of $236 million, or 34 cents a share. Excluding special
items, per-share earnings were 40 cents.
Revenue fell 14% to $1.5 billion.
Analysts polled by Thomson Reuters had forecast adjusted
earnings of 43 cents a share on revenue of $1.53 billion.
Excluding currency impacts and an extra week in the prior-year
period, revenue was flat.
Symantec said it saw growth in its enterprise security business
for the first quarter in two years.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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