Symantec secures Veritas in largest ever software merger


20 Dec 2004

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Software companies Symantec and Veritas have announced a merger agreement valued at an estimated US$13.5bn, making it the world’s biggest software transaction to date. The all-stock deal, which is expected to close in the second quarter of next year, will combine the world’s leading security software company with the storage and systems management provider.

The merger will create the world’s fourth largest software company, one that expects to record US$5bn in aggregate revenue for the fiscal year 2006, beginning in April 2005. Approximately 75pc of the revenue of the combined company is due to come from the enterprise market and the remainder from the consumer business. In addition, the combined company will have approximately US$5bn in cash.

The company will operate under the Symantec name. Symantec’s chairman and CEO, John W Thompson, will continue this role at the head of the combined company. Gary Bloom, chairman, president and CEO of Veritas, will become vice-chairman and president of the combined company. The board 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 merger did not come about because of a need to reduce cost; the companies claimed that their market strategies were compatible and that there was little overlap in strategic operations, product lines or research and development.

In a conference call, Thompson spoke of “the obvious convergence between securing the infrastructure and ensuring information availability” as a driver behind the deal. “Combining Veritas and Symantec strengthens our ability to serve the needs of customers with security and availability solutions, thereby ensuring the integrity of their most valuable asset – information,” he added. “The combined company will offer customers one of the broadest portfolios of software and solutions on the most complete set of operating platforms, and across all tiers of the infrastructure.”

The current total market opportunity for the new Symantec has been estimated at US$35bn, according to forecasts from IDC; this is anticipated to reach US$56bn by 2007.

Both companies have a presence in Ireland, although a spokesperson for Symantec said it was too soon to say how these would be integrated in the new structure. Veritas announced it was setting up a Dublin sales office earlier this year, while Ireland is Symantec’s European Operations Centre, responsible for manufacturing, order administration and product support. The Blanchardstown facility currently employs in excess of 500 staff.

By Gordon Smith