By Danny Yadron And Chelsey Dulaney
Symantec Corp., the company synonymous with antivirus software,
is slimming down to focus on security tools hackers can't so easily
defeat.
The company said Tuesday it had agreed to sell its Veritas
data-storage and recovery business to investors led by
private-equity firm Carlyle Group LP for $8 billion in cash. Other
investors in Veritas include GIC, Singapore's sovereign-wealth
fund.
The deal underscores growing competition in computer security as
data breaches routinely land on front pages and evening
newscasts.
Symantec helped pioneer the industry with its antivirus software
during the 1980s and 1990s. But it has fallen behind as intruders
learned how to outsmart its software. It also faces new rivals,
including Cylance Inc., CrowdStrike Inc. and FireEye Inc., with
different approaches to blocking hackers, or alerting customers
they're under attack.
Chief Executive Michael A. Brown said in a statement that the
sale allows Symantec to focus on growing its security business.
Symantec has said it is working on new products to compete with
these and other companies.
The Mountain View, Calif., company had been exploring strategic
options for the storage business. Last year, Symantec said it would
split into two publicly traded companies, focusing on cybersecurity
and information management. In January, it said the
information-management company would be named Veritas Technologies
Corp.
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 for roughly $13.5
billion in stock. The deal never paid off.
The past few years have been rough for the company. Last spring,
Symantec fired its second chief executive in as many years as the
company tried to combat declining revenue.
Separately, Symantec on Tuesday reported worse-than-expected
double-digit declines in revenue and profit in its fiscal first
quarter, ended July 3. But the company said its enterprise-security
business grew for the first time in two years.
Symantec has struggled to shift its consumer-security business
to subscriptions from one-time license sales.
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 year-earlier
period, the company said revenue was flat.
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 15% this year, fell 5% in mid-day
trading.
The deal is expected to close by Jan. 1.
Carlyle named Bill Coleman, 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.
Write to Danny Yadron at Danny.Yadron@wsj.com Chelsey Dulaney at
Chelsey.Dulaney@wsj.com
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