Symantec's big experiment in combining security and storage has officially come to an end. The company, which bought storage giant Veritas for $13.5 billion in 2005, announced Tuesday that it has agreed to sell its storage business to an investor group for $8 billion in cash.
The investor group is led by The Carlyle Group along with GIC, a sovereign wealth fund in Singapore. The deal, which is subject to regulatory approvals, is expected to close by Jan. 1.
Last fall, Symantec's board of directors announced a plan to divide the company into two publicly traded companies -- one focused on security, the other on information management. On Tuesday, the company said the board concluded that the sale was in the best interest of its shareholders.
“This transaction strengthens our financial foundation, paving the way for Symantec to grow its security business and increase its lead as the world’s largest cybersecurity company," Symantec President and CEO Michael Brown said in a prepared statement.
The Carlyle Group said Bill Coleman, former chairman and CEO of BEA Systems, will serve as Veritas CEO. Bill Krause, a Carlyle operating executive who previously was the CEO of 3Com, will serve as chairman.
“Veritas is a market innovator with global scale, an iconic brand, and significant growth potential," Carlyle managing directors Patrick McCarter and Cam Dyer said in a joint statement. "Bill Coleman is a proven leader whose strategic vision and strong execution skills will leverage Veritas’ new-found position as a private, stand-alone company to grow the firm and provide customers an integrated information management solution."
Veritas, which was founded in 1983, was a top provider of storage software when Symantec bought it 10 years ago. Symantec touted how the deal made it the fourth-largest software company. I recall John Thompson -- Symantec's CEO at the time of the acquisition -- talking a lot of talk about synergy between security and storage. But the industry and investors never really bought into his grand vision.
When the company ousted Thompson's successor Enrique Salem in 2012, an analyst told me that the business logic of the deal never made sense and the merging of the corporate cultures drove good talent out.
According to the Carlyle Group, more than 86% of the Fortune 500 companies use Veritas products and services. The company has four primary product lines: backup and recovery, integrated appliances, information intelligence and information availability.
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