Symantec flogs Veritas unit to investors for $8bn

Veritas was acquired in 2004 for $13.5bn

Symantec has sold off its Veritas information management (IM) unit for $8bn (£5.14bn), rounding off its nearly year-long process to separate it from the core business.

Last autumn, Symantec announced plans to split into two units – its core security business and an IM arm, which it later gave the Veritas name.

Veritas was acquired by Symantec in 2004 for $13.5bn (£8.6bn) and today the business was sold for $8bn.

An investor group led by the Carlyle Group together with Singapore's sovereign wealth fund GIC snapped up the business in an all-cash transaction. The deal is expected to close on 1 January next year.

Symantec chief executive Michael Brown said the sale means his firm can focus solely on security.

"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," he said. "We believe the agreement with the investors, including The Carlyle Group and GIC, delivers an attractive and certain value for the Veritas business, and is in the best interests of all stakeholders."

A "variety of strategic alternatives" were explored by Symantec management regarding the future of Veritas, the firm said, adding that the deal it settled on "delivers and generates the best value of the Veritas business for Symantec shareholders".

The Carlyle Group announced that Veritas would be run by BEA Systems founder Bill Coleman, who will become chief executive of the newly acquired arm, and Bill Krause, who will become chairman. Krause was previously chief executive of 3Com and serves on a number of boards.

Carlyle managing directors Patrick McCarter and Cam Dyer said in a joint statement:

"Veritas is a market innovator with global scale, an iconic brand, and significant growth potential.

"Bill Coleman is a proven leader whose strategic vision and strong execution skills will leverage Veritas' new-found position as a private, standalone company to grow the firm and provide customers an integrated information management solution. Our significant experience investing in software businesses, as well as our extensive experience with carve-out transactions, positions us well to support Bill and the existing management team in creating value at Veritas."