Symantec in talks to split company in two entities: Reports
08 Oct 2014
Following Hewlett-Packard and eBay, Symantec is reported to be in talks to split the company into two entities, with one focusing on storage and the other to address the security business, Bloomberg reported, citing confidential sources.
According to the report an announcement of the split, supported by CEO Michael Brown, could be made in a few weeks.
Brown, who was the company's interim president and CEO since March this year, was appointed CEO last month, and following his taking over, the company had returned to year-on-year revenue growth consistently exceeding its revenue and operating margin guidance, the company said. In March, the company had fired its former CEO and president Steve Bennett, the second CEO to go in less than two years.
The Mountain View, California, company had considered and rejected the idea of a split in the past, according to Bloomberg, which quoted a person with knowledge of the matter.
The company reported in August that revenue in the first quarter of its fiscal year 2015 stood at $1.7 billion, up 2 per cent from the same quarter last year. Net profit at $236 million stood at 50 per cent in the quarter. The information management business of the company, focused on backup and recovery, archiving, storage and high availability solutions, contributed 37 per cent to revenue, with the balance revenue coming from its information security, and user productivity and protection businesses.
Reuters had reported in April that the biggest US security software maker, was in the process of hiring banks to help advise on strategy and defend against possible activist investors.
Reuters had also been told by sources, that private equity firms too were looking at the possibility of breaking up Symantec into smaller pieces, some of which might also be attractive to industry peers.
Symantec, which also offered data storage products, had seen revenue growth turn negative in recent quarters, in sharp contrast with the rest of the security software market, which was growing least 10 per cent to 15 per cent annually.
The slowdown was partly due to eroding PC sales, that hurt demand for its software, which often came bundled with new computers. The company had not been able to make a dent in the mobile security market.