Symantec unloads information management division Veritas
Will sell business to the Carlyle Group, other investors, for $8 billion in cash
Symantec has entered into a definitive agreement 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 $8 billion in cash.
The transaction, which was unanimously approved by Symantec's Board of Directors, is expected to close by January 1, 2016.
Upon closing of the transaction, Symantec expects to receive approximately $6.3 billion in net cash proceeds, subject to certain customary post-closing adjustments. The Symantec Board has authorized a $1.5 billion increase to its existing share repurchase program, bringing the total to $2.6 billion, with $2 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 $0.15 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, Symantec president and CEO, said, “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, said, “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.”
The Carlyle Group has announced separately that Bill Coleman and Bill Krause will become CEO and Chairman, respectively, of Veritas upon closing of the transaction.
Carlyle Managing Directors Patrick McCarter and Cam Dyer said, “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.