Symantec Sells Veritas For $8B

The computer security company bought Veritas, a storage software firm, in 2005 for $13.5 billion.
Katie Kuehner-HebertAugust 11, 2015

Symantec on Tuesday said that it was selling 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.

“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,” Symantec president and chief executive Michael A. Brown said in a press release. “We believe the agreement with the investors … delivers an attractive and certain value for the Veritas business, and is in the best interests of all stakeholders.”

Mountain View, Calif.-based Symantec had been exploring strategic options for the business as an alternative to its plan to split into two publicly traded companies, according to Dow Jones. Symantec has struggled to shift its consumer cybersecurity business to subscriptions from one-time license sales.

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Upon closing of the deal, expected by Jan. 1, 2016, Symantec expects to receive roughly $6.3 billion in net cash proceeds. Its 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.

Symantec will also maintain its quarterly cash dividend of 15 cents 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.

Separately, The Carlyle Group said that Bill Coleman and Bill Krause would become CEO and chairman, respectively, of Veritas upon closing of the deal.