According to an announcement made by Symantec today, the company has sold its Veritas division to a Washington-based private equity firm, The Carlyle Group for $8 Billion in cash.
With this sale, Veritas joins the list of 240+ portfolio companies which have over $18 Billion worth of equity invested into them by the firm.
The news of the sale comes as a bit of a surprise since Symantec had only last fall, announced it’s intention of splitting into two different companies — namely, Symantec and Veritas. However, it seems like the lure of hard cash proved to be too strong for the company, which preferred to make a sale rather than keep on with the splitting strategy.
Symantec, which is basically a computer security and cloud service related company, decided on the split to give Veritas — which deals with Information Management — its own space to grow and mature while the former focused on security and the up and coming cloud technology.
However, the arguments in favor of selling off the company finally won over the supporters of the split. For one, The Carlyle Group is all fired up and ready at the prospect of taking the Information management firm to greater heights, displaying a commitment that Symantec lacked. As per Patrick McCarter, a Carlyle managing director
We are wholly behind growing this business and growing a company that we hope to take public in the future.
Also, right now Symantec’s main focus in on gaining converts to its cloud services along with generating revenues via subscription to them. However, it’s a time taking process and the cash received by this deal will help smooth out the future paths for Symantec.
As per a statement by R Ray Wang, founder at Constellation Research to TechCrunch,
The sale allows Symantec to double down on their core by buying them time to deal with the cloud revenue conversion.
In short its a win-win situation for everyone. Symantec gets to focus on its security and cloud business with $8 Billion in the kitty, The Carlyle Group gets an asset with great industrial presence, a loyal customer base and a huge potential for growth. In all of this, Veritas gets a better, more open environment to pursue stronger growth.