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The Carlyle Group to Acquire Veritas from Symantec

martinwolf Transaction Analysis
Financial Information
  • Total Transaction Size: $8 billion
  • EV/LTM Revenue*: 3.08x
Transaction Facts
  • The Carlyle Group (Nasdaq:CG) announced its plans to purchase Veritas, a data storage and server management business, from Symantec (Nasdaq:SYMC).
  • The transaction would be the largest US leveraged buyout this year, surpassing April’s $5.3 billion LBO of Informatica.
  • The Carlyle Group will lead a group of investors that currently includes Singaporean wealth fund G.I.C., and plans to add other co-investors before the year ends.
  • Full transaction details were not announced, but Veritas generated $2.6 billion in revenue for the 2015 fiscal year, ending in March. Symantec expects $6.3 billion in cash proceeds and has added $1.5 billion to its share buyback program.
  • It was reported in April that Symantec had contacted private equity firms and potential strategic acquirers about acquiring Veritas, which Symantec initially acquired in 2005 for $13.5 billion.
Focusing on Core Strengths
  • Struggling to Succeed: In its earnings report also released today for the quarter ending July 3, Symantec’s revenue fell 14% to $1.50 billion, missing analyst expectations of $1.53 billion, and was flat excluding currency impacts and an extra week in last year’s quarter. However, the company did report growth in its enterprise security business, a first in two years.
  • Moving Forward: With this transaction, Symantec is looking to refocus its resources on growing its security business. Last October, Symantec announced a decision to split into two parts. One part would be focusing on computer security software for businesses and consumers, while the other would be focused on information management, with Veritas providing the core. The company is now planning to use the resources from this sale to better compete with newer rivals including FireEye, Cylance and others.
  • Future Opportunities: Carlyle plans to build up Veritas’ information management offerings including cloud deployments, managed services, on-premise infrastructure and others that did not work to Symantec’s synergistic advantages. Carlyle has a wealth of experience to draw upon from its history of successful carve-outs and technology investments.
For more information about this transaction, click here to read the press release. martinwolf was not the advisor in this transaction.
*EV/LTM Revenue is approximated by dividing the transaction amount by Veritas’ FY 2015 Revenue of $2.6 billion.
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