Symantec to sell Veritas to private equity group in $8bn deal


Financier Worldwide Magazine

October 2015 Issue

October 2015 Issue

Symantec Corporation has entered into a definitive agreement to sell its information management business, Veritas, to an investor group led by the Carlyle Group for $8bn in cash.

Upon closing of the transaction, Symantec, as well as GIC (Singapore’s sovereign wealth fund) and other expected co-investors, expects to receive approximately $6.3bn 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 also authorised a $1.5bn increase to its existing share repurchase program, bringing the total to $2.6bn, with $2bn expected to be returned to shareholders over the 18 month period following the close of the transaction.

Additionally, the board has decided 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 percent of its after-tax domestic cash proceeds from the sale to its shareholders.

While exploring a variety of strategies for maximising the value of Veritas, Symantec’s board of directors concluded that the sale agreement should: deliver and generate the best value of the Veritas business for Symantec shareholders; provide Symantec with significant proceeds to continue organic and inorganic investments in the rapidly growing market for security products and services; and simplify the separation process for Veritas customers, partners and employees.

“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 cyber security company,” said

Michael A. Brown, Symantec’s president and CEO. “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.”

Founded in 1982, Symantec, a Fortune 500 company, operates one of the largest global data-intelligence networks, providing leading security, backup and availability solutions where vital information is stored, accessed and shared.

Laying out the new Veritas management structure, the Carlyle Group has announced that Bill Coleman, the founder, chairman and CEO of BEA Systems, and Bill Krause, a Carlyle Group executive and former chief executive of 3Com, will become CEO and chairman, respectively.

“Veritas is a market innovator with global scale, an iconic brand, and significant growth potential,” said Carlyle managing directors Patrick McCarter and Cam Dyer. “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.”

J.P. Morgan Securities LLC is serving as financial adviser to Symantec, while 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 advisers to Carlyle and GIC. Alston & Bird LLP, Allen & Overy, Latham & Watkins LLP, and Covington & Burling LLP represented The Carlyle Group, while Ropes & Gray LLP and Sidley Austin LLP represented GIC.

The transaction, which has been unanimously approved by Symantec’s board of directors, is subject to regulatory approvals and other closing conditions and expected to close by 1 January 2016.

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Fraser Tennant

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