Tech

Symantec's Veritas sale price slashed by $1 billion

The antivirus provider will receive $1 billion less than expected in the firm's sale of Veritas.

Written by Charlie Osborne, Contributing Writer Jan. 20, 2016 at 1:29 a.m. PT

Symantec has admitted the sale of Veritas will be sliced by $1 billion due to "uncertainties" surfacing in the acquisition.

The cybersecurity firm and antivirus provider told investors on Tuesday that the purchase agreement has been "amended," resulting in a purchase price of $7.4 billion, a hefty reduction from the original price tag.

The spin-off of information management business Veritas, sold as part of a business refocus by Symantec, was originally agreed for $8 billion by global asset management firm Carlyle Group LP.

Symantec expected to raise $6.3 billion in net cash from the purchase while the rest of the proceeds would be funnelled towards an investor share buyback program.

Security

The company will now receive roughly $5.3 billion in cash -- after tax -- and has also agreed to increase the amount of offshore cash remaining in Veritas from $200 million to $400 million. Symantec will also keep a $400 million equity interest in Veritas.

However, the companies have cited "uncertainties" and a "difficult environment" as reasons for revising the buyout terms. While specific details relating to the salvaged deal have not been revealed, Reuters reports that fluctuations in the finance markets led to the failed sale of a $5.6 billion debt package intended to back the deal.

The deal is expected to close on 29 January 2016.

Michael Brown, Symantec president and CEO commented:

"In a difficult environment, we can move forward with a high degree of certainty around closing a transaction that represents attractive value for shareholders. In addition, this transaction will allow Symantec to further focus and accelerate its strategy as the world's leading cybersecurity company."
Symantec originally acquired Veritas for $13.5 billion in 2005.

In a separate statement, the antivirus provider released updated results for Q3 2016. Symantec anticipates revenue to be above the midpoint of guidance issued on 5 November 2015, which estimated earnings of $890 million to $920 million.