Sign up for our newsletter
Technology / Cybersecurity

Symantec to return cash to investors as Silver Lake injects $500m into cybersecurity firm

Private-equity company Silver Lake is making a $500m investment in Symantec in order to help the cybersecurity firm achieve its long-term strategic vision.

Symantec said it will buy back more shares, reduce costs and move ahead with a transformation plan it unveiled in October 2014.

The company plans to return $5.5bn in capital to shareholders by the end of March 2017, using the funds from Silver Lake as well as proceeds from the recent sale of its Veritas information management business.

Symantec plans to cut $400m in costs by the end of the 2018 fiscal year.

White papers from our partners

Citing people familiar with the matter, the Wall Street Journal reported that activist hedge fund Elliott Management has amassed a large stake in Symantec, becoming one of its largest shareholders.

Sources were also cited by the Wall Street Jurnal as saying that Elliott supports the Silver Lake deal and the other measures announced by Symantec.

Silver Lake managing partner Ken Hao will join the Symantec board.

Hao said: "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.

"We look forward to partnering with Symantec to achieve its long-term strategic vision."

Symantec has also reported the results of its third quarter of fiscal year 2016, ending 1 January. Revenue declined 6% to $909m in Q3, from $970m reported in the same quarter last year.

Net income decreased to $170m in Q3, or 25 cents a share, from $222m, or 32 cents, in the period a year earlier. The company said enterprise security revenues increased year-over-year for the third consecutive quarter, in constant currency.

For the fourth quarter, Symantec expects revenues of between $885m and $915m, with earnings between 15 cents and 18 cents.

In August, Symantec agreed to sell its Veritas unit to a group of investors led by private-equity firm Carlyle Group for $8bn in cash.

The cybersecurity firm had been planning to split into two publicly traded companies before it agreed to sell Veritas. Last month, both the parties renegotiated the deal for a lower price of $7.4bn due to some uncertainties.

Through the transaction, Symantec plans to expand its security business and increase its lead as the world’s largest cybersecurity company.

This article is from the CBROnline archive: some formatting and images may not be present.

CBR Staff Writer

CBR Online legacy content.