Symantec Corp to sell data storage unit Veritas for $8 bn

Norton antivirus software maker Symantec Corp has agreed to the sale of its data storage unit, Veritas, for $8 billion to a group led by Carlyle Group LP as it sought cash turn for turning around its security software business.

The deal, the biggest US leveraged buyout this year, would give Symantec much-needed funds to compete in the cyber security market with Microsoft, Intel and Kaspersky Labs.

Upon completion of the sale, expected to close at the end of the year, Veritas will become a privately-held company.

Shares of Symantec, which also reported weak quarterly results yesterday, were down as much as 6 per cent.

Symantec had been facing adverse conditions with weak PC sales hurting demand for its security software, which came bundled with computers.

Demand for antivirus software had also fallen with users turning to advanced products to protect against sophisticated cyber attacks.

"Now they really get a new lease on life in terms of focusing on their core security DNA as the Veritas storage piece has been a massive black cloud on the Symantec story for a decade," Reuters quoted FBR Capital Markets analyst Daniel Ives.

Symantec will use the proceeds to make inexpensive acquisitions as lofty valuations left few security companies within its reach.

"If you think about potential acquisition candidates, those will be names like Proofpoint, Qualis, FortiNet Inc as well as a host of private companies," Ives said.

Security software maker Symantec Corp is in talks to sell its Veritas data-storage business to private equity firm Carlyle Group for $7 billion to $8 billion, Bloomberg reported citing people with knowledge of the matter (See: Symantec in talks to sell Veritas data-storage business to Carlyle for $7 bn - $8 bn).