Security Software Giant Symantec Exploring Breakup of Company
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Security software maker Symantec Corp is in advanced talks to split its business into two entities - one that sells security programs and another that does data storage, Bloomberg reported, citing people with knowledge of the matter.
An announcement may be a few weeks away, according to Bloomberg.
Symantec declined to comment on the report. "The company does not comment on rumors," Symantec spokeswoman Kristen Batch told Reuters in an email.
Reuters reported in April that Symantec, the biggest U.S. security software maker, was in the process of hiring banks to help advise on strategy and defend against possible activist investors.
Private equity firms were also looking at the possibility of breaking up Symantec into smaller pieces, some of which may also be attractive to industry peers, sources told Reuters at that time.
A breakup may position Symantec's separated businesses as acquisition targets, given that large companies including EMC Corp and Hewlett-Packard Co are interested in the stand-alone security business or in an independent storage business, Bloomberg reported.
Earlier this year, the company, known for its Norton antivirus software, abruptly fired its CEO as it struggles to revive growth amid eroding PC sales.
Symantec, which also offers data storage products, has seen revenue growth turn negative in recent quarters, unlike the rest of the security software market, which is growing at least 10 percent to 15 percent annually.
The slowdown is partly due to eroding PC sales, affecting demand for its software, which often comes bundled with new computers. It has failed to gain a strong footing in the market for mobile security.
If it goes ahead with the breakup, Symantec would join technology companies that are spinning off operations in an attempt to become more agile and capitalize on faster-growing businesses.
HP said earlier this week that it would split into two listed companies, separating its computer and printer businesses from its faster-growing corporate hardware and services operations.
Online auction company eBay Inc said last week it would spin off electronic payment service PayPal.
(Reporting by Supriya Kurane in Bangalore; Editing by Gopakumar Warrier)