Symantec To Sell Veritas To Investor Group Led By Carlyle For $8 Bln Cash

(RTTNews) - Security software maker Symantec Corp. (SYMC) Tuesday said it has entered into a definitive agreement to sell its information management business, known as Veritas, to an investor group led by alternative asset manager The Carlyle Group (CG) together with Singapore's sovereign wealth fund GIC, and other expected co-investors for $8 billion in cash.

Upon closing of the transaction, Symantec expects to receive about $6.3 billion in net cash proceeds. The company will focus on returning capital to shareholders and also in investing in the business.

Founded in 1983 and headquartered in Mountain View, California, Veritas is a provider of storage and server management software solutions.

The transaction was unanimously approved by Symantec's Board of Directors. It is expected to close by January 1, 2016.

The Symantec Board has authorized a $1.5 billion increase to its existing share repurchase program, bringing the total to $2.6 billion. Of this, $2 billion is expected to be returned to shareholders over the 18 month period after the close of the transaction.

The Board has also determined that Symantec will maintain its quarterly cash dividend of $0.15 per common share. Between its dividend and share repurchases, the company expects to return about 120 percent of its after-tax domestic cash proceeds from the sale to its shareholders.

Symantec believes that the all-cash transaction provides the firm with significant proceeds to continue organic and inorganic investments in the growing market for security products and services. It will also support its capital return initiatives through the purchase of common stock and its dividend.

Michael 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."

The Carlyle Group announced separately that seasoned technology executives Bill Coleman and Bill Krause would become CEO and Chairman, respectively, of Veritas upon closing of the transaction.

SYMC closed up 0.9 percent on Monday at $22.91.