Buyout Firms Size Up Symantec -- WSJ
07 Septembre 2019 - 9:02AM
Dow Jones News
Private-equity investors Permira and Advent approach tech
firm
By Cara Lombardo and Dana Cimilluca
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 7, 2019).
Symantec Corp. has received interest from a pair of
private-equity suitors seeking to buy the cybersecurity firm for
more than $16 billion after it agreed to a sale of a big chunk of
its business, according to people familiar with the matter.
Permira and Advent International Corp. recently approached
Symantec proposing a takeover deal valuing Symantec at $26 to $27 a
share that would hand them the company's consumer operation while
preserving the sale of its enterprise business to Broadcom Inc.
Such a structure could reduce the tax bill for its shareholders,
the people said.
It couldn't be learned how exactly this deal would work and it
is far from guaranteed it will happen. If it does, it could involve
the firms buying Symantec and proceeding with the sale to Broadcom
or waiting for the enterprise deal to close and then acquiring the
consumer unit, which includes Norton antivirus and LifeLock
identity-theft-protection products.
Selling a company when a major transaction like the Broadcom
deal is about to close would be complicated and unusual.
Symantec last month said it would sell its enterprise-security
business to Broadcom, a major chip and software producer, for $10.7
billion. Symantec plans to distribute proceeds in a special
dividend of $12 a share after the deal closes, expected by the end
of the year.
It also said it would boost a stock-repurchase program.
The stock had risen roughly 16% to $23.70 since The Wall Street
Journal reported on the deal with Broadcom, giving Symantec a
market value of roughly $14.5 billion. Symantec shares rose about
4.5% on Friday.
A deal at $26 or $27 a share would value Symantec at about $16.4
billion.
The private-equity firms believe the extra premium is justified
by what they see as the tax inefficiency of the deal with Broadcom,
which is expected to trigger steep dividend-tax payments for
shareholders related to the special payout, the people familiar
with the matter said.
Broadcom had earlier this year considered a deal for all of
Symantec and was close to inking one before the talks fell apart.
Permira and Advent also previously considered such a deal.
The enterprise unit serves businesses and has helped make
Symantec the world's largest seller of security software for
corporate networks, though the consumer operation is more
profitable.
Last week, Symantec said interim Chief Executive Richard Hill
would resign following the sale to Broadcom and initiated a search
for his replacement. Symantec a year ago drew the attention of
activist investor Starboard Value LP, which struck a settlement for
board seats.
Write to Cara Lombardo at cara.lombardo@wsj.com and Dana
Cimilluca at dana.cimilluca@wsj.com
(END) Dow Jones Newswires
September 07, 2019 02:47 ET (06:47 GMT)
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