Symantec Selling Veritas: End Of An Acquisition That Never Lived Up To Promises


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Matt Cain
Veritas' Matt Cain

Veritas will soon be the newest startup in the data protection market it dominated for decades, both as an independent storage vendor and as part of Symantec.

Symantec on Tuesday surprised no one by revealing its plans to sell its Veritas business to a group of outside investors, closing the door on a long, sometimes painful journey as a single company since Symantec's 2005 acquisition of Veritas.

That acquisition, which promised to bring two of the hottest IT technologies -- storage and security -- into a unified offering ended up with two companies that for the most part shared little more than a corporate structure.

Symantec on Tuesday confirmed July reports that it is selling Veritas to a group of outside investors, including the Carlyle Group, Singapore-based GIC and others, for $8 billion -- far below the $13.5 billion Symantec paid for Veritas Software 10 years ago.

Symantec on Tuesday also reported revenue for its first fiscal quarter 2016 of $1.499 billion, down 14 percent from the $1.735 billion it reported for its first fiscal quarter 2015. The company earned $117 million, or 17 cents per share on a GAAP basis, in the first quarter, down about 50 percent from $234 million, or 34 cents per share. On a non-GAAP basis, first quarter earnings were $275 million, or 40 cents per share, down from $313 million, or 45 cents per share, in the prior year.

For its information management business, which substantially makes up what will be known as Veritas, the company reported first fiscal quarter revenue of $587 million, down 10 percent from last year.

 

[Symantec Sells Veritas: Too Little, Too Late?]

Ironically, the fact that the legacy Symantec and legacy Veritas business never really did merge appears to be making the process to split the two easier than it might have been.

For Symantec, it was obvious that the two businesses were diverging, said Matt Cain, chief product officer of Mountain View, Calif.-based Symantec.

"When we did a strategic analysis of the company, it became obvious quickly that the focus on data management and security were diverging quickly," Cain told CRN. "This was more of a market-driven trend than anything related to the history of the company. We're focused on the future and on the improved results we've seen."

The split into Symantec and Veritas is a good move for the channel, said Kurt Klein, CEO of CMT, a Santa Clara, Calif.-based solution provider and long-term Symantec and Veritas channel partner.

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