Carlyle joined with Singapore's sovereign wealth fund GIC and other investors on the deal. The transaction is expected to close by January 1, 2016. "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 CEO Michael A Brown said.
After the closing of the transaction, Symantec expects to receive about $6.3 billion in net cash proceeds. Symantec said it will take a "comprehensive and disciplined approach" to capital deployment focussed on both returning capital to shareholders and investing in the business. Its Board has authorised a $1.5 billion increase to its existing share repurchase programme, 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 Veritas business generated $2.5 billion in revenue for Symantec in <g data-gr-id="34">fiscal year</g> 2014. Veritas competes in markets that are an estimated $11 billion, potentially expanding to $16 billion in 2018 with a CAGR of seven <g data-gr-id="32">per cent</g> from 2013 to 2018.
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. In October last year, Symantec had announced plans to separate into two independent businesses ?- one focussed on Information Security, and the other on Information Management.
"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," Symantec Executive Vice President and Veritas General Manager John Gannon said.
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, he added. BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Investment Bank and Jefferies have agreed to provide debt financing for the transaction.
"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," Carlyle Managing Directors Patrick McCarter and Cam Dyer said.