Symantec Corporation (NASDAQ:SYMC) is mulling the sale of Veritas, its data storage and recovery business. The cyber-security giant is exploring the sale as an alternative to splitting the company into two publicly traded companies.
Symantec has in recent weeks contacted private equity forms and prospective industry bidders about the sale of Veritas. The deal could be worth more than $8 billion is it goes through. Symantec had acquired Veritas in 2005 for $13.5 billion.
Symantec in 2014 had announced that it would split its cyber-security and information management businesses into two publicly traded companies. The intention of the split was to create two businesses: one focused on security and other focused on information management.
According to sources, Symantec has been mulling the sale of Veritas for months. Symantec has also approached NetApp Inc. (NASDAQ:NTAP), EMC Corporation (NYSE:EMC) and several private equity firms to gauge their interest according to sources. The interest of potential buyers has been mixed due to the tax burden associated with splitting of the company.
The slowdown in the sale of PC has hurt the security business. Sluggish demand for storage and data management software has diminished the value of Veritas. Symantec has struggled to shift its consumer security business to subscriptions from one-time license sales. In March 2014, Chief Executive, Steve Bennett, was fired making him the second CEO to be ousted in two years.
According to sources, JPMorgan Chase is the advisor of Symantec on the issue of potential split or even the sale of the whole company.
The markets responded favourably to the news of Veritas sale and Symantec’s shares closed 5.6% higher at $25.58 with heavy trading volume on Friday.
The Street Ratings Team rates Symantec’s shares as a Buy with a rating score of B+. Street Ratings believes that Symantec has certain strengths that will have more impact than its weaknesses.