Symantec Agrees to Purchase Veritas

CUPERTINO, Calif. (AP) -- Network security software maker Symantec Corp. said Thursday it agreed to purchase data storage company Veritas Software Corp. in an all-stock deal valued at about $13.5 billion.

Under the agreement, which has been unanimously approved by both companies' boards, each share of Veritas stock will be converted into 1.1242 Symantec common shares.

In premarket activity on the Nasdaq, Veritas shares were up 3.1 percent, or 88 cents, at $28.99, and Symantec shares dropped 5 percent, or $1.38, to $26.

Upon closing, Symantec shareholders will own about 60 percent and Veritas shareholders about 40 percent of the combined company, which will operate under the Symantec name.

Symantec chairman and chief executive John W. Thompson will continue as chairman and CEO of the combined company, and Veritas chairman, president and CEO Gary L. Bloom will serve as vice-chairman and president. The merged company's board will include 6 members of Symantec's current board and 4 from Veritas for a total of 10 members.

Total revenue of the merged company is forecast to be about $5 billion for fiscal year 2006, with about 75 percent of the revenue expected to come from the enterprise business and 25 percent from the consumer business. In addition, the combined company will have about $5 billion in cash.

Symantec said it expects to close the deal in the second calendar quarter of 2005, subject to shareholder and regulatory approvals. The company expects the acquisition to add to earnings in the first combined year of operations.

Lehman Brothers acted as exclusive financial adviser to Symantec, and Goldman Sachs acted as exclusive financial adviser to Veritas.

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