Symantec will lose out on $1bn cash with Veritas sale

Security provider Symantec is getting $1bn less cash than it had originally hoped for in the sale of its Veritas storage business, the company said on Tuesday.

The buyer, private equity firm Carlyle Group, will now pay $7.4bn for Veritas, including $6.6bn in cash, instead of the previously stated $8 billion that the two companies had agreed on last August. Symantec and Carlyle also agreed to increase the amount of offshore cash remaining in Veritas from $200m to $400m, which will result in a net consideration to Symantec of $7bn.

The amended terms come after “uncertainties” developed regarding the transaction. But both parties have now agreed that all key conditions have been satisfied, and the deal will close on 29 January.

Michael A Brown, Symantec’s 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.”

Symantec acquired Veritas in 2005 for $13.5bn, and will now use proceeds of the sale to boost its credentials in the burgeoning cyber security market.

Brown said: “In addition, this transaction will allow Symantec to further focus and accelerate its strategy as the world’s leading cybersecurity company.”

Symantec also updated investors on its expected third quarter of 2016 results on Tuesday, predicting revenue and earnings above the midpoint given in November 2015 of $890m to $920m.