Symantec Corp is to sell its information management business, known as Veritas, to an investor group led by The Carlyle Group together with GIC, Singapore’s sovereign wealth fund, and other expected co-investors, for USD8 billion in cash.
The transaction, which was unanimously approved by Symantec's Board of Directors, is expected to close by 1 January, 2016.
Upon closing of the transaction, Symantec expects to receive approximately USD6.3 billion in net cash proceeds, subject to certain customary post-closing adjustments. Symantec will take a comprehensive and disciplined approach to capital deployment focused on both returning capital to shareholders and investing in the business. The Symantec Board has authorised a USD1.5 billion increase to its existing share repurchase program, bringing the total to USD2.6 billion, with USD2 billion expected to be returned to shareholders over the 18 month period following the close of the transaction. The Board has also determined that Symantec will maintain its quarterly cash dividend of USD0.15 per common share, which represents an overall increase to the company’s dividend payout ratio post-separation. Between its dividend and share repurchases, Symantec expects to return about 120% of its after-tax domestic cash proceeds from the sale to its shareholders.
Michael A Brown (pictured), Symantec president and CEO, says: “This transaction strengthens our financial foundation, paving the way for Symantec to grow its security business and increase its lead as the world’s largest cybersecurity company. We believe the agreement with the investors, including The Carlyle Group and GIC, delivers an attractive and certain value for the Veritas business, and is in the best interests of all stakeholders.”
John Gannon, Symantec Executive Vice President and Veritas General Manager, says, “Since the Board first announced the separation of Veritas, we have been preparing the company to operate independently and evolving our business strategy, while continuing to deliver industry-leading solutions to our customers. We are thrilled to partner with The Carlyle Group and GIC, which have a strong track record of successfully growing businesses and share our dedication to Veritas’ strategy and success. Veritas will continue to provide next-generation information management solutions to serve the world’s largest and most complex environments, including multiple cloud deployments, managed services and on-premise infrastructure.”
Carlyle Managing Directors Patrick McCarter and Cam Dyer say: “Veritas is a market innovator with global scale, an iconic brand, and significant growth potential. Bill Coleman is a proven leader whose strategic vision and strong execution skills will leverage Veritas’ new-found position as a private, stand-alone company to grow the firm and provide customers an integrated information management solution. Our significant experience investing in software businesses, as well as our extensive experience with carve-out transactions, positions us well to support Bill and the existing management team in creating value at Veritas.”
The transaction is subject to regulatory approvals and other closing conditions. BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Investment Bank and Jefferies have agreed to provide debt financing for the transaction.
J.P. Morgan Securities LLC is serving as financial advisor to Symantec and Fenwick & West LLP and Baker & McKenzie LLP are serving as legal counsel. BofA Merrill Lynch, Morgan Stanley & Co. LLC, and UBS Investment Bank are serving as financial advisors to Carlyle and GIC. Alston & Bird LLP, Allen & Overy, Latham & Watkins LLP, and Covington & Burling LLP represented The Carlyle Group. Ropes & Gray LLP and Sidley Austin LLP represented GIC.
