Symantec is teaming up with a private equity firm that has specialized in helping to revive ailing technology companies.
The maker of Norton antivirus software on Thursday said Silver Lake will make a $500 million “strategic investment” and receive a seat on its board as it continues its turnaround plan that focuses on the core cybersecurity business.
“Silver Lake’s investment in Symantec validates the significant progress we’ve made in our transformation and is a tremendous vote of confidence in the company,” Symantec CEO Michael A. Brown said in a news release.
Silver Lake managing partner Ken Hao will be appointed to the Symantec board upon the closing of the investment. “As a premier cybersecurity provider, Symantec has the potential to solve some of the most significant challenges facing the rapidly growing market for security solutions,” he said.
Symantec said it also plans to return $5.5 billion in capital to shareholders through the next year using the funds from Silver Lake as well as proceeds from the recent sale of its Veritas data-storage and recovery business.
As the Wall Street Journal reports, the company “helped pioneer the industry with its Norton antivirus software during the 1980s and 1990 but hasn’t managed to attain similar dominance in an era of growing cyber-threats.”
Up to Thursday’s close of $19.18, the Mountain View, California-based company’s stock had lost 25% in the past 12 months. On Friday, it closed up 3%, at $19.76.
The WSJ also reported that activist hedge fund Elliott Management Corp. had accumulated a large stake in Symantec, becoming one of its largest shareholders.
“Silver Lake and Elliott have both made fortunes helping to revive technology companies that have fallen out of favor or stalled for various reasons,” the Journal noted.
For the quarter ended Jan. 1., Symantec posted a profit of $170 million, or 25 cents a share, down from $222 million, or 32 cents a share, a year earlier. Revenue fell 6% to $909 million. The figures beat the consensus of analysts polled by Thomson Reuters for $905.8 million and 24 cents.