Symantec announced it has entered into a definitive agreement to sell its Enterprise Security assets, which include the Symantec name, to semiconductor giant Broadcom, for $10.7 billion in cash. The transaction, which was approved by Symantec’s Board of Directors, is expected to close before the end of the calendar year pending regulatory approvals.
Symantec’s enterprise offerings include endpoint security, web security services, cloud security and data loss prevention solutions.
“It is a testament to our market leadership and dedication to the mission of making the world a safer place, that Broadcom has chosen Symantec’s Enterprise Security assets to expand their reach into cyber security,” said Daniel H. Schulman, Chairman of the Symantec Board of Directors.
“By unlocking value from Enterprise Security, we are significantly advancing our ongoing transformation strategy and positioning our consumer cyber safety business, Norton LifeLock, for success.”
What this consumer business will be called once the Symantec name changes hands is unknown.
“Upon closing of the transaction, Symantec expects to receive $10.7 billion, which is estimated to yield approximately $8.2 billion of after tax proceeds. Symantec expects to return approximately 100% of its after-tax cash proceeds in the form of a $12.00 per share special dividend to shareholders after the close of the transaction. In addition, we expect to increase our regular dividend by 67% to $0.125 per share in the quarter following the close,” Symantec stated.
“Prior to closing we will continue to manage the Enterprise Security business to best serve our customers, while partnering with Broadcom to plan for a smooth transition.”
According to Rick Hill, Symantec’s Interim President and CEO, the Consumer Cyber Safety segment contributed 90% of Symantec’s total company operating income in the first quarter of fiscal year 2020.
“We expect this asset divestiture will enable our Norton LifeLock business to grow revenue in the mid-single digits, with continued strong cash flow from operations and expanded earnings growth,” he added.
The Board of Directors is currently conducting a search for a permanent CEO for the consumer business.
“M&A has played a central role in Broadcom’s growth strategy and this transaction represents the next logical step in our strategy following our acquisitions of Brocade and CA Technologies,” said Hock Tan, President and CEO of Broadcom.
“Symantec’s enterprise security business is recognized as an established leader in the growing enterprise security space and has developed some of the world’s most powerful defense solutions that protect against today’s evolving threat landscape and secure data from endpoint to cloud. We look forward to expanding our footprint of mission critical infrastructure software within our core Global 2000 customer base.”