Symantec to buy Veritas for $13.5 billion
Published: December 16, 2004, 5:09 AM PST
By Mike Ricciuti
Staff Writer, CNET News.com
In a long-rumored move, security software maker Symantec said Thursday that
it will buy storage specialist Veritas Software in a deal worth roughly
$13.5 billion.
The combined company will form a powerhouse in security, systems and storage
management software with roughly $5 billion a year in revenue.
The company will operate under the Symantec name, with John W. Thompson,
Symantec's chief executive, serving as chairman and CEO. Gary L. Bloom,
Veritas' chief executive, will become vice chairman and president.
"The new Symantec will help customers balance the need to both secure their
information and make it available, thus ensuring its integrity,� Thompson
said in a statement.
The deal is the latest sign of consolidation in the enterprise software
market and the second major acquisition this week. On Monday, PeopleSoft
agreed to be acquired by Oracle after an 18-month battle.
Analysts expect more consolidation as companies try to increase their range
of products to better compete for tight IT budgets. That pressure is
prompting midsize compaies and the industry's largest players to consider
combinations to reach the broadest swath of the market.
For instance, Symantec, the leading security software maker, sells its
products to both businesses and consumers, while Veritas serves midsize and
large companies with its storage management systems. The companies are also
banking on the desire of large companies to consolidate the number of
vendors that they do business with.
"Customers are looking to reduce the complexity and cost of managing their
IT infrastructure and drive efficiency with fewer suppliers," Thompson said.
The board of directors of the combined company will include six members of
Symantec's current board and four from Veritas' current board for a total of
10 members, the companies said.
Symantec will pay $30.78 a share in the deal, which represents a premium of
9.5 percent over Veritas' closing price Wednesday of $28.11 on the Nasdaq.
Under the deal, which has been approved by both boards of directors, Veritas
stock will be converted into Symantec stock at a fixed exchange ratio of
1.1242 shares of Symantec common stock for each outstanding share of Veritas
common stock, the companies said. Upon closing, Symantec shareholders will
own approximately 60 percent and Veritas shareholders approximately 40
percent of the combined company.
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