January 5, 2005 12:21 PM PST
Symantec, Veritas reach out to investors
Symantec, which announced plans last month to acquire storage vendor Veritas, is hoping to become the one-stop shop for chief information officers looking to consolidate the number of vendors they use. The new company would offer CIOs data storage, security protection and information recovery technology.
The CEOs--Symantec's John Thompson and Veritas' Gary Bloom--said their customers, partners and an assortment of hardware vendors have responded to the merger in a "positive fashion," but investors have yet to fall in line. Thus came Wednesday's Webcast pitch--the companies will need their investors, as well as regulators, to sign off on the deal.
"The deal will close sometime in the second quarter of this calendar year. We don't expect any regulatory issues, since there is no product overlap, and, as investors begin to understand the merger, we don't think this will be an issue," Thompson said during the Webcast.
He said he could not understand why Symantec's price-to-earnings ratio has declined since it announced the Veritas merger, even though the company expects to grow 18 percent in fiscal 2006 as a merged entity.
"There's no other software company over $3 billion that has faster growth," Thompson said. Symantec expects to generate revenues of $5 billion and become the fourth-largest software company, post merger. It also expects to save $100 million in costs over the first four quarters after the deal closes.
Shares of Symantec and Veritas, however, are both down since the deal was announced roughly three weeks ago. The CEOs stressed that other parties have shown more enthusiasm.
"Customer response has been great," Bloom said. "Hardware vendors have responded positively, too...It will unleash a whole new wave of partnering opportunities because they will no longer
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