Symantec Said to Hire JPMorgan to Explore OptionsAlex Sherman and Jordan Robertson
Symantec Corp. is hiring JPMorgan Chase & Co. to explore its options and defend itself from activist shareholders, according to people with knowledge of the situation, as the security-technology company faces investor pressure to improve its business.
The Mountain View, California-based company plans to hire JPMorgan after interviewing banks this week, said one of the people, who asked not to be identified because the discussions are private. Symantec has been struggling as a record personal-computer slump curbs spending on antivirus software. The company fired President and Chief Executive Officer Steve Bennett last month and its shares are down 17 percent over the past year.
“The company commonly engages financial advisers to help with the business,” Colleen Lacter, Symantec’s chief communications officer, said yesterday. Tasha Pelio, a spokeswoman for JPMorgan, declined to comment. Reuters earlier yesterday reported that Symantec had hired a bank.
Shares rose 1.1 percent to close at $20.25 in New York yesterday.
Symantec executives are “touching all their bases” in hiring a bank, said Steve Ashley, an analyst at Robert W. Baird & Co. in Milwaukee, Wisconsin, who has the equivalent of a hold rating on the shares. “I’m sure activists have been looking at this thing.”
Bennett had blamed Symantec’s lower revenue in recent quarters on a sales-force restructuring that was meant to help restart growth and instead disrupted customer relationships. Director Michael Brown was named interim CEO while the company seeks Bennett’s replacement. Bennett had replaced Enrique Salem, who was ousted in July 2012.
Symantec has faced investor pressure to break itself up since the company has both a computer-security business and a data-storage business.
While Salem was CEO, he was under pressure to sell the data-storage business, a move that would have undone a signature achievement of his predecessor, John Thompson, who is now chairman of Microsoft Corp. Thompson headed Symantec when it got into storage with a $10.2 billion acquisition of Veritas Software Corp. in 2005. Bennett and Salem both said they wouldn’t split the company.
In security, Symantec has grappled with the PC slump that has reduced demand for antivirus software that is often sold bundled with new computers. Symantec is also facing intensifying competition from companies such as FireEye Inc. and Palo Alto Networks Inc. in a market for security software and equipment that will increase 9.1 percent this year to $71.7 billion, according to Gartner Inc.
Antivirus software, once the premier security technology, is now widely seen as incapable of catching all but the easiest-to-catch attacks as hackers have become more sophisticated. Symantec’s revenue is projected to drop 3 percent this year after rising 3 percent in 2013, according to analysts’ average estimate as compiled by Bloomberg.
Symantec stock initially soared under Bennett. He eliminated 1,000 jobs, or 5 percent of staff, and the honeymoon ended as sales sputtered and top executives left. In November, the company announced the departure of Francis deSouza, president of products and services, two months after Chief Financial Officer James Beer left for McKesson Corp.