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Carlyle to Acquire Veritas: Largest US Leveraged Buyout in 2015


Aug. 24 2015, Published 1:09 p.m. ET

Bloomberg calls Carlyle’s acquisition of Veritas the largest leveraged buyout in 2015

According to Bloomberg, The Carlyle Group’s acquisition of Symantec’s (SYMC) Veritas is by far the biggest leveraged buyout (or LBO) deal in the United States in 2015 to date. In an LBO, the acquisition is funded by taking on debt or borrowing funds. Before Carlyle’s $8 billion offer for Veritas, the $5.3 billion LBO of Informatica was the largest US LBO in 2015.

The Carlyle Group, founded in 1987, is a private equity firm that manages ~$193 billion in private equity, real estate, credit, and hedge fund assets. Its strong interest appears to be in the telecom, media, and technology (or TMT) sector, since it has invested approximately $18 billion worth of equity in 243 companies in that sector.

The above chart shows the funds raised by US private equity in the last couple of years. In calendar year 2Q15, $30 billion worth of funds were raised compared to $38 billion in 1Q15.

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Storage space is going through a restructuring phase

Symantec leads the backup and recovery software market with 30% market share. It’s followed by EMC (EMC) and IBM (IBM) with 18% and 17% market share, respectively. In August 2015, EMC was forced to consider a buyout by its own subsidiary VMware (VMW) or break up its federal structure to unlock shareholder value. Hewlett-Packard (HPQ), another leading player in storage space, is on the breakup route. So it seems that a way of restructuring has engulfed the IT (information technology) space, especially storage space.

You can consider investing in the PowerShares QQQ ETF (QQQ) to gain exposure to Symantec. QQQ invests about 0.32% of its holdings in Symantec.


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