NEW YORK, Feb 21 (Reuters) – AT&T Inc (T.N), the second-biggest U.S. wireless carrier, is exploring a sale of its cybersecurity division, potentially undoing an acquisition it completed five years ago, according to people familiar with the matter.
The sale of the cybersecurity business would add to a string of divestments AT&T has turned to in order to pay down debt following its $108.7 billion acquisition of Time Warner Inc in 2018, a deal it has since also unwound.
In the last two years, AT&T sold a 30% stake in its pay TV unit DirecTV to private equity firm TPG for $1.8 billion, and received $40.4 billion in cash by spinning off and merging its Warner Media business with Discovery Communications to form Warner Bros Discovery Inc (WBD.O).
AT&T has been working with Barclays Plc (BARC.L) to solicit potential bids for its cybersecurity business, which was called Alienvault when it was acquired in 2018 in a roughly $600 million deal, the sources said. It is not clear how much the business could fetch now.
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The sources cautioned that no deal is certain and requested anonymity because the matter is confidential. AT&T and Barclays declined to comment.
AT&T’s cybersecurity division helps small-to-medium-sized businesses keep their information technology networks, including laptops, desktops, servers and mobile devices, secure.
The acquisition of Alienvault was aimed at giving AT&T an edge in signing up and retaining corporate clients, but the deal’s rationale has eroded as cybersecurity startups that offer cheap alternatives mushroomed.
AT&T reduced its net debt by about $24 billion in 2022 and is seeking to reduce it further to about $100 billion by 2025 from $132.2 billion at the end of December.
Credit ratings agency Moody’s Investors Service Inc said in a note on Tuesday that paying down debt was central to AT&T’s ability to invest in fiber and 5G wireless technology while continuing to afford paying out a dividend.
Reporting by Milana Vinn in New York
Editing by Bill Berkrot
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