NEW YORK (Reuters) - Symantec Corp’s chief executive is looking to do acquisitions and next week may let investors know just how hungry the security and storage software company will be this year.
Enrique Salem, CEO of the world’s No. 5 software maker, has not done a large acquisition since he announced plans a year ago to buy VeriSign Inc’s widely used technology for securing payments over the Internet in a transaction worth $1.3 billion.
At the Reuters Global Technology Summit in New York on Tuesday, he said he has not ruled out doing another deal of that size, though his preference is to do smaller, “tuck-in” acquisitions. Acquisition targets that Symantec is focusing on include storage or security companies that provide mobility, cloud computing and virtualization.
He said Symantec may disclose as early as next week at its annual analyst meeting in New York how much of its $3 billion in cash it will earmark for deals this year.
Last year the company budgeted $2 billion for acquisitions. Besides the VeriSign assets, it bought privately held data encryption software maker PGP Corp for $300 million.
Investors have been critical of the company’s use of cash for acquisitions.
Salem said he expects to see a wave of consolidation in the technology industry over the next few years as big software makers snap up smaller companies. He declined to say what role Symantec would play.
“My expectation is that consolidation will continue. You’ll see meaningful consolidation that will change tech meaningfully,” he said.
Salem said that Symantec is reviewing its options for its holdings in a joint venture with China’s Huawei Technologies Co that makes specialized computers for security and storage.
U.S. investors have shown an appetite for shares in Chinese technology companies this year, buying up stakes in mobile security software maker Netqin Mobile and 21Vianet Group.
Symantec, which invested $150 million in the venture, owns a 49 percent stake in Huawei-Symantec Inc. It has a right to buy an additional 2 percent in the company for $28 million.
Salem said that Symantec is now talking to Huawei about the possibility of exercising that right or selling a stake in the venture to the public through an initial public offering. He said they hope to make a decision by the end of the year.
The joint venture generated a loss of $63 million on revenue of $224 million in 2009, according to Symantec’s most-recent 10-K filing with the U.S. Securities and Exchange Commission.
He also said that Symantec is starting to generate meaningful revenue from sales of software and services for mobile devices such as smart phones and tablets. He expects revenue from those products to reach $100 million within 2 years.
Salem, who has come under pressure from activist investors over the past year to split up the company’s storage and security divisions, said he has no intention of breaking up Symantec.
“Some of the products that the activists want us to get rid of are central to dealing with growth and data,” he said. “I am happy with the portfolio.”
Symantec’s shares closed at $19.67 on Tuesday.
Reporting by Jim Finkle and Nadia Damouni; Editing by Phil Berlowitz