The Carlyle Group agrees to buy Veritas
On August 11, 2015, Symantec (SYMC) made headlines when The Carlyle Group announced that it has agreed to acquire Veritas, Symantec’s information management and data storage business. Symantec also shared the news in its fiscal 1Q16 results. The Carlyle Group and GIC Private Limited, a Singapore sovereign wealth fund, will pay $8 billion for Veritas. The deal, which received approval from Symantec’s board of directors, is expected to close by January 1, 2016.
After the acquisition, Bill Coleman will become CEO (chief executive officer) of Veritas. Coleman is the founder of BEA Systems, which was acquired by Oracle (ORCL) in 2008.
Following the announcement of the sale of Veritas, Symantec shares rose ~7% in pre-market trading. However, Symantec shares eventually fell ~7% on the back of Symantec reporting a double-digit decline in its revenue and profits for fiscal 1Q16. So far in 2015, Symantec’s share price has fallen 17%.
Symantec approached other companies before settling with Carlyle
In July 2015, Bloomberg reported that Symantec was about to close the Veritas deal with The Carlyle Group for $7–$8 billion. Prior to that, Symantec had approached storage companies such as EMC (EMC) and NetApp (NTAP) as well as some private equity firms to assess the market for the sale of Veritas. Veritas, an information management business, encompasses backup and recovery, e-discovery, archiving, storage management, and information availability solutions.
If you’re bullish about Symantec, you can invest in the Technology Select Sector SPDR ETF (XLK). XLK invests about 0.41% of its holdings in Symantec.