Symantec Corp. will buy Veritas Software Corp. in an all-stock transaction, the companies announced in December. Based on closing stock prices, the deal values Veritas at around US$13.5 billion, they said.
The deal is expected to close in the second quarter of 2005, subject to customary closing conditions. Symantec shareholders will own around 60 per cent of the merged company, which will retain the Symantec name, the companies said in a joint announcement.
Veritas, based in Mountain View, Calif., sells backup, archiving and file system software. Symantec, of Cupertino, Calif., sells software to protect home and office computer systems and networks, including firewalls and tools to detect viruses and network intrusions. By joining forces, they will be able to help enterprise customers secure their information better, the companies said. About three-quarters of the combined company’s revenue will come from enterprise products and services, they said.
But the companies might have a hard time convincing industry insiders that their apparent merger will be relevant to customers.
“I would say this merger is in pursuit of an imagination of a customer rather than a real customer,” said William Hurley, senior analyst at the Enterprise Application Group in Portland, Ore. “Symantec has some interesting identity management and change management products and patch and virus-updating tools, but an alliance or strategic partnership [with Veritas] is more wise in bringing confidence to the customer than an out-and-out merger.”
Michael Smith, director, data utility at Teranet Inc. in Toronto, was surprised this week to learn of the possible merger. Teranet uses Symantec’s Norton antivirus on both its desktops and its servers, as well as using Veritas’ Volume Manager and NetBackup for at least the past five years.
He doesn’t share Hurley’s concerns that the merger could hurt his firm’s relationship with Veritas or the quality of Veritas’ products. “From our point of view, we don’t expect to see any difference. I expect it to be business as usual.” He said Teranet will simply wait to see what occurs but has no plans to stop using products from either vendor.