Veritas to Be Sold, Paper Says

The sale of Veritas Software Corp. (Nasdaq: VRTS) to Symantec Corp. (Nasdaq: SYMC) could be imminent, in a deal that exceeds $13 billion.

According to a report in the New York Times this morning, the two companies are on the verge of completing negotiations, though key items remain unresolved. The companies declined to comment, the paper said.

If the merger goes through at the price reported, it would be the second big-ticket marriage of software suppliers to happen this month, beating yesterday's announcement of the acquisition by Oracle Corp. (Nasdaq: ORCL) of PeopleSoft Inc. (Nasdaq: PSFT) for $10.3 billion (see The Price Is Right for PeopleSoft).

While not more than a blip on the storage software radar screen, Symantec, maker of the Norton series of antivirus products, has been pushing its line of backup and disaster recovery products, including LiveState Recovery Advanced Server 3.0, which runs on IP SANs from Network Appliance Inc. (Nasdaq: NTAP). (See IP SANs Are Sizzling.)

Veritas, in contrast, is the second-largest producer of storage software, according to recent figures from IDC (see IDC: Storage Software Hits $1.9B). In the third quarter 2004, the firm reported it took 21.7 percent of $1.9 billion in worldwide quarterly revenue, second to EMC Corp. (NYSE: EMC), which had a 31.8 percent share.A merger could create a formidable storage software rival to EMC, Computer Associates International Inc. (CA) (NYSE: CA), Hewlett-Packard Co. (NYSE: HPQ), and IBM Corp. (NYSE: IBM).

Veritas reported $497 million in sales last quarter, representing 2 percent growth sequentially. The company has 7,400 employees and cash and investments of about $2.5 billion. CEO Gary Bloom said in October that the firm's on track to reach $2 billion in sales for 2004 (see Veritas Rebounds).

Symantec has reported $1.8 billion in revenues for 2004. If the Veritas deal happens, it will be the company's fifth acquisition this year.

Expect further reporting as the story unfolds.

Mary Jander, Site Editor, Byte and Switch0