When the security and information management (IM) divisions of Symantec announced they were about to start separation processes in October last year, a lot of emphasis was put on the company’s continuing business-as-usual strategy. The asset-sharing was ongoing and everything seemed on track for end-of-year completion, until the August 11, 2015 announcement of the $8bn sale of Veritas to the Carlyle Group and GIC, Singapore’s sovereign wealth fund.
The sale of the Veritas to the Carlyle Group and GIC is taking place with unanimous approval from the Symantec board of directors. It also comes with an $8bn price tag that Michael A Brown, Symantec president and CEO, says strengthens the security company’s operational position and will allow Symantec to grow its security business further.
Completion of the sales transaction is scheduled to close by January 1, 2016, which exactly fulfills the original timeline set for completing the separation of the Symantec Security and Veritas IM business units.
As two organizations running independently, the new Symantec and Veritas businesses would have faced significant challenges in their respective markets. Both would have come under pressure from an ever-growing range of competitors. Following the Veritas sale, the competitors and indeed the challenges won’t change, but it should result in two independent organizations with the backing and financial muscle to compete at the highest levels in their respective markets.
For Veritas, there will be significant value in re-establishing the iconic brand for its new owners. With their backing, there should be opportunities to grow the business and focus solidly on its role as a market innovator and provider of integrated information management solutions.
For Symantec, the all-cash transaction offers the opportunity to grow its security business through continuing project investment and external growth. The last two years have seen a downturn in external investments and a greater focus on product integration, which at the time was right for the security business. Now, along with its recently announced new-business incubation activities, expect to see Symantec back on the security acquisition trail.
“Symantec puts simulation and gamification on the security training agenda”, IT0022-000469 (August 2015)
“Symantec bolsters its IoT security portfolio with new VC partnership”, IT0002-000327 (July 2015)
Andrew Kellett, Principal Analyst, Infrastructure Solutions
Europe, Middle East & Africa team - +44 (0) 207 017 7700
Asia-Pacific team - +61 (0)3 960 16700
US team - +1 646 957 8878
Already an Ovum client? Login to the Knowledge Center now