martinwolf
Transaction Analysis
Silver Lake Invests $500 Million in Symantec
Financial Information*
- Silver Lake Investment $500 Million
- Symantec Enterprise Value $12.4 Billion
Transaction Facts
- IT security software provider Symantec Corp. (Nasdaq:SYMC) announced today that private equity firm Silver Lake will make a $500 million investment in the company, with managing partner Ken Hao joining Symantec's board. The deal involves Silver Lake buying $500 million of convertible debt that can be exchanged for equity at $21 per share - approximately 10 percent higher than Symantec's Thursday closing price.
- With the move, Symantec announced it is raising its capital return program to $5.5 billion, composed of a $500 million accelerated stock buyback program, a $4 per share special dividend and $2.3 billion in additional stock buybacks. The program is set to be completed March 2017.
- The company also released its third quarter 2016 earnings. At $170 million, or 26 cents per share, earnings were down from 33 cents per share last year but within guidance and above the consensus of analyst expectations.
- Shares of Symantec were up 9.5 percent after hours, hitting $21 per share by 6:00 pm EST.
A New Start for 2016
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Welcome News for the Channel: The involvement of Silver Lake in Symantec's board is a welcome development for Symantec investors and channel partners. The private equity firm has long demonstrated its ability to achieve significant value creation though smart investments in leading technology firms such as Dell, Gartner, Alibaba and Avago.
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 The Right Time for a Change: Silver Lake's investment comes following Symantec's sale of its Veritas data storage unit to the Carlyle Group, announced last August and completed in January for a lowered purchase price of $7.4 billion. As such, Silver Lake has the benefit of being able to focus on new opportunities rather than addressing legacy concerns.
- More than It Appears: As of today, Symantec has $500 million in net cash, with a market cap of approximately $13 billion. The true value of this investment is not the monetary amount - it is the transformative potential that Silver Lake has for improving Symantec's business and creating significant new value.
For more information about this transaction
, click here to read a news article featuring Marty Wolf's thoughts on the transaction, or click here to read the press release.
martinwolf was not the advisor in this transaction.
*Financial information from Capital IQ.
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With offices in the San Francisco Bay Area, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 140 transactions in nineteen countries and sold seven divisions of Fortune 500 companies. The firm is also a presenting sponsor of the Global IT M&A Forum. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com. To learn more about martinwolf, contact Matthew Putzulu at [email protected]. © martinwolf 2016 |
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"There is nothing permanent
except change."
Heraclitus
_________
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