Symantec agrees to charge Carlyle $1 bn less for Veritas
21 January 2016
Antivirus software maker Symantec Corp yesterday said that it has agreed to receive $1 billion less in cash for its data storage unit Veritas from private equity firm Carlyle Group amid a difficult environment in the debt market.
Under the terms of the revised agreement, Carlyle will pay $7.4 billion against the earlier agreed $8 billion, the companies said in a statement yesterday.
Symantec will retain a stake in Veritas worth $400 million while an additional $200 million in cash will be put on the company's balance sheet.
Neither Symantec nor Carlyle gave the exact reasons for lowering the purchase price, but media reports suggested that banks were not able to get a $5.6-billion debt package to fund the deal amid a difficult debt market environment.
Upon closing of the transaction, Symantec expects to receive approximately $5.3 billion in after-tax cash proceeds and the equity interest in Veritas compared to $6.3 billion after-tax proceeds under the prior purchase agreement.
Michael Brown, Symantec president and CEO, said, ''In a difficult environment, we can move forward with a high degree of certainty around closing a transaction that represents attractive value for shareholders.''
Peter Clare, Carlyle's managing drector and co-head of US Buyouts, said, ''Carlyle remains excited about the long-term value creation opportunity at Veritas and looks forward to closing the acquisition on January 29th.''
In August Carlyle agreed to buy Veritas for $8 billion in what would have been the biggest US leveraged buyout of 2015 (See: Symantec Corp to sell data storage unit Veritas for $8 bn).
California-based Symantec was founded in 1982 by computer scientists. The company has now become one of the world's largest software companies with more than 18,500 employees in more than 50 countries.
In 2015 Symantec split the company into two independent publicly traded companies with Symantec focusing on security, while Veritas focusing on information management.