SAN JOSE, Calif. -- Symantec Corp.'s reported interest in acquiring Veritas Software Corp. for more than $13 billion would represent the computer security giant's biggest step yet beyond its core businesses of defending against viruses and thwarting hackers. Investors weren't impressed, though, and Symantec's shares plunged 16 percent.
Symantec, best known for its Norton-branded security programs, has been on an acquisition binge that has extended its reach into security-related areas like intrusion detection, security management, battling spam, and consulting.
But with Veritas, the leader in data storage and backup software, Symantec could broaden its reach to include data storage, backup and archiving software. All are elements of a sound network protection strategy, but such offerings are hardly purely security-related.
If a deal is reached, it would be one of the largest in the software industry's history. The New York Times yesterday reported talks have been ongoing for more than a month, and that a deal could be announced as early as this week, though some unresolved issues remain.
Sherri Walkenhorst, a Symantec spokeswoman, said the company does not comment on "rumor and speculation." Spokesmen for Veritas did not return calls seeking comment.
If it acquires Mountain View-based Veritas, Symantec would instantly become a leader in the field of data management and backup programs. Veritas has an estimated 40 percent of the backup-and-archiving software market, according to research firm IDC. It has a 60 percent share of the market for storing and organizing data files.
The deal would dwarf Symantec's storage-related acquisition last year of a privately held company called PowerQuest for $150 million in cash.
But Symantec might not be the only company looking to acquire Veritas, according to a Merrill Lynch research report by analyst Shebly Seyrafi.
"We believe there's an increasing chance that another company may bid on Veritas' shares," Seyrafi wrote, adding possible suitors include business software maker Oracle Corp., disk drive maker Hitachi Ltd., and data storage company EMC Corp.
Oracle on Monday reached a deal to acquire rival business software maker PeopleSoft Inc. after a bitter courtship that started in June 2003. That headline-grabbing saga is valued at $10.3 billion -- considerably less than the estimated value of a Symantec-Veritas combination.
In the most recent quarter, which ended Sept. 30, Veritas earned $96.2 million on sales of $496.7 million. In the same period, Cupertino-based Symantec earned $135.6 million on sales of $618.3 million.