Symantec announced today that it had sold its Veritas division to The Carlyle Group, a Washington, DC-based private equity firm for $8 billion in cash.
The move comes after Symantec, mostly known as a computer security company, announced it was splitting into two separate publicly traded companies last fall. The first was going to be Symantec, which as you might expect focused on security and the second was Veritas, which concentrated on information management. It was named for a storage vendor that merged with Symantec back in 2005.
The split was never officially completed, but it seems as though the company got a nice return, which could allow them to focus on their core security business moving forward. In particular it’s shifting to the cloud and the recurring subscription revenue everyone craves.
“The sale allows Symantec to double down on their core by buying them time to deal with the cloud revenue conversion,” R Ray Wang, founder at Constellation Research told TechCrunch.
But converting on-premises customers to subscriptions takes work and the $8 billion gives the company time to retool its sales and marketing and move to a cloud model, Wang explained.
As for Veritas, it becomes part of the Carlyle Group, which saw a company with a lot of potential, that was being stifled inside of Symantec. It never really had a sense of how to take advantage of an information management asset like Veritas, which explains why it was spinning it out as a separate company.
Apparently, before the final split happened, Symantec saw a better opportunity for its investors and decided to go forward with the sale.
As for Carlyle, it saw a company with good bones, a leader that was at or near the top of many product categories and perhaps more importantly, a loyal and satisfied customer base with a good set of products geared toward growing markets like big data and the data storage that is part of that.
Carlyle says its committed to helping Veritas to eventually become a successful independent company. “We are wholly behind growing this business and growing a company that we hope to take public in the future,” Patrick McCarter, a Carlyle managing director said.
Carlyle had been in talks for several months with Symantec before it pulled the trigger on the purchase. The company has a long history of investing in what it calls the “technology, media and telecommunications” space with a lifetime investment of $18 billion of equity invested in 243 portfolio companies.