Symantec Buys Veritas

By | December 20, 2004

Computer security maker Symantec is buying backup and storage maker Veritas, to create the world´s fourth-largest software maker. The all-stock acquisition was initially valued at $13.5 billion, but the price dropped rapidly as investors worried that the deal signaled a slowing in Symantec´s ability to deliver growth.

Wall Street was puzzled by the move, feeling that Symantec is a larger and more flexible company than Veritas. Wall Street feels Veritas is a slow growing, immobile company incapable of long term growth.

Industry analysts, though, praised the move as a further step in industry consolidation – feeling that larger security companies are the only way to keep the most valuable players in the industry from being swallowed up by the largest software companies such as Microsoft and IBM.

Symantec is hoping that with the Veritas acquisition, they can create a one-stop storage, backup, management and security company to provide “desktop to edge” security and protection against viruses, malware. Symantec will also focus on delivering solid data availability directly to desktops, hopefully making the job of a “backup and restore technician” obsolete.

Investors aren´t convinced. Symantec´s shares plunged $2.25, or 8 percent, to $25.13, while Veritas´ shares fell 12 cents to $27.99.

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