Symantec sells data storage unit to Carlyle Group for $8B

Cybersecurity giant Symantec Corp. is selling its data storage and recovery unit Veritas to the private equity firm Carlyle Group for $8 billion in cash.

Symantec first announced last fall that it would be separating its two businesses to reduce complexity and boost growth, and has been seeking buyers for Veritas for several months, according to Reuters. Amid less than sterling quarterly results, the sale will infuse some capital into Symantec’s core cybersecurity business.

{mosads}“The all-cash transaction provides Symantec with significant proceeds to continue organic and inorganic investments in the rapidly growing market for security products and services,” the company said in a statement.

On Tuesday, Symantec reported double-digit declines in revenue and profit in the first quarter that were worse than analysts predicted.

The company’s business is primarily direct-to-consumer sales of the antivirus software Norton that come bundled with PCs, and in a weak PC market, Symantec has struggled to move from one-time license sales to subscriptions, according to multiple reports. Meanwhile, some experts question whether its flagship product is up to the task of preventing more sophisticated attacks.

The silver lining: The company says that it saw growth in its enterprise security business for the first quarter in two years.

“With a strong product pipeline of more than a dozen enterprise security products on track to be released this year, Symantec is now focused on extending its lead as the world’s largest cybersecurity company,” CEO Michael Brown said in the company’s earnings report.

Information-security spending is expected to more than double to $170 billion by 2020, a boom which some analysts have suggested may be the makings of a bubble. The explosive growth is driven in part by the spate of high-profile breaches at both private and government organizations. Brown reports that 40 percent of the company’s new customers came from the healthcare industry, where breaches at Anthem, Premera and others have put the limelight on subpar security efforts.

The Veritas deal is expected to close Jan. 1, 2016.