December 16, 2004 — (WEB HOST INDUSTRY REVIEW) — IT security firm Symantec (symantec.com) and storage software developer VERITAS (veritas.com) will merge, the companies announced on Thursday.
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The new company will operate under the Symantec name with John W. Thompson, chairman and chief executive officer of Symantec, staying on in his positions with the newly merged entity. Gary L. Bloom, chairman, president and chief executive officer of VERITAS, will be vice-chairman and president. The new board of directors will include six members of Symantec’s current board and four from VERITAS’s current board.
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The deal, which has been unanimously approved by the board of directors on both sides, is valued at approximately $13.5 billion. VERITAS stock will be converted into Symantec stock at a fixed exchange ratio of 1.1242 shares of Symantec common stock for each outstanding share of VERITAS common stock. Once the transaction is completed, Symantec and VERITAS stockholders will own 60 and 40 percent of the combined company respectively.
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Symantec said the merger expands its revenue base, and significantly raises its financial scale and resources. Approximately 75 percent of revenue is expected to come from the enterprise business and 25 percent from the consumer business. The merger brings the combined company’s cash flow to approximately $5 billion. Revenue for the fiscal year 2006 is expected to be $5 billion, the company said.
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“Customers are looking to reduce the complexity and cost of managing their IT infrastructure and drive efficiency with fewer suppliers,” says John W. Thompson, chairman and CEO of Symantec. “The new Symantec will help customers balance the need to both secure their information and make it available, thus ensuring its integrity. We believe that information integrity provides the most cost-effective, responsive way to keep businesses up, running and growing in the face of system failures, Internet threats or natural disasters.”
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The transaction is expected to close in the second calendar quarter of 2005 and is subject to customary closing conditions, in addition to shareholder and regulatory approval.
