SYMC Symantec Corporation

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): January 29, 2016

 

 

Symantec Corporation

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware		000-17781		77-0181864
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

350 Ellis Street, Mountain View, CA				94043
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code    (650) 527-8000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.01

Completion of Acquisition or Disposition of Assets.

On January 29, 2016, Symantec Corporation (“Symantec”) completed the previously-announced sale of its Veritas information management business (the “Business”) to Veritas Holdings Ltd. (f/k/a Havasu Holdings Ltd.), an entity formed and controlled by an affiliate of The Carlyle Group and certain co-investors (the “Buyer”), pursuant to the terms of that certain Purchase Agreement dated as of August 11, 2015, by and between Symantec and the Buyer, as amended. Under the terms of the Purchase Agreement, the Buyer purchased the assets of Symantec’s information management business for $7.4 billion ($7.0 billion net of cash remaining in the Business). The net consideration consisted of $6.6 billion in cash, 40 million B common shares of Buyer with a nominal value of $400 million and the Buyer’s assumption of certain liabilities of the Business.

Attached as Exhibit 99.01 to this Current Report on Form 8-K, and incorporated herein by this reference, is a copy of Symantec’s press release dated January 29, 2016, announcing the completion of the disposition.

 

Item 9.01

Financial Statements and Exhibits.

 

(b)

Pro forma financial information

Unaudited pro forma financial information of Symantec to give effect to the disposition of its information management business is included in Exhibit 99.02 filed herewith and incorporated by reference into this Item 9.01.

 

(d)

Exhibits

 

Exhibit No.		Description
99.01		Press release, dated January 29, 2016
99.02		Pro forma financial information of Symantec Corporation (Unaudited)

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				Symantec Corporation
Date: February 4, 2016				By:		/S/ THOMAS J. SEIFERT
						Thomas J. Seifert
						Executive Vice President and Chief Financial Officer

 

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Exhibit Index

 

Exhibit No.		Description
99.01		Press release, dated January 29, 2016
99.02		Pro forma financial information of Symantec Corporation (Unaudited)

 

4

Exhibit 99.01

FOR IMMEDIATE RELEASE

Symantec Completes Sale of Veritas, Now Singularly Focused on

Cybersecurity

01/29/2016

Board Authorizes $2 Billion Increase to Capital Return Program; Expects to Return More Than $4 Billion to

Shareholders by End of March 2017

MOUNTAIN VIEW, Calif.—(BUSINESS WIRE)—Symantec Corp. (NASDAQ:SYMC) today announced that it has completed the sale of Veritas to a group of investors led by The Carlyle Group. In connection with the closing of the transaction, Symantec received approximately $5.3 billion in after-tax cash proceeds.

Symantec is on track to return more than $4 billion in capital to its shareholders by the end of March 2017. This capital return includes:

 

•

A $500 million accelerated share repurchase completed in January 2016;

 

•

$1.8 billion remaining at the end of the Company’s third quarter from its previously announced share repurchase program; and

 

•

The additional $2 billion of capital return that the Board announced today.

Michael A. Brown, Symantec president and CEO, said, “Symantec now has a clear path forward as the global leader in cybersecurity. With the Veritas transaction completed, Symantec has the increased financial flexibility to maximize shareholder value through returning significant capital to shareholders and to consider acquisition opportunities that will accelerate our unified security strategy.”

Symantec will provide specifics on its capital return program during its third quarter earnings conference call, which is scheduled for Thursday, February 4, 2016.

J.P. Morgan Securities LLC served as financial advisor to Symantec and Fenwick & West LLP served as legal counsel to Symantec.

About Symantec

Symantec Corporation (NASDAQ: SYMC) is the global leader in cybersecurity. Operating one of the world’s largest cyber intelligence networks, we see more threats, and protect more customers from the next generation of attacks. We help companies, governments and individuals secure their most important data wherever it lives.

NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please visit the Symantec News Room at http://www.symantec.com/news.

Symantec and the Symantec Logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the U.S. and other countries. Other names may be trademarks of their respective owners.

Forward-Looking Statements

This press release contains forward looking statements regarding the Company’s expected capital return. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from results expressed or implied herein. Such risk factors include general economic conditions; fluctuations and volatility in the Company’s stock price; the ability of the Company to successfully execute strategic plans, including acquisitions or strategic transactions; maintaining customer and partner relationships; the competitive environment in the software industry, fluctuations in tax rates and currency exchange rates; the timing and market

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acceptance of new product releases and upgrades; the successful development of new products, and the degree to which these products and businesses gain market acceptance. The Company assumes no obligation, and does not intend, to update these forward-looking statements prior to reporting its third quarter results. Additional information concerning risks that could cause actual results to differ from current expectations is contained in Risk Factors, set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended April 3, 2015.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160129005919/en/

Source: Symantec Corp.

MEDIA:

Symantec Corp.

Kristen Batch, 503-516-6297

kristen_batch@symantec.com

or

INVESTOR:

Symantec Corp.

Jonathan Doros, 650-527-5523

jonathan_doros@symantec.com

Exhibit 99.02

SYMANTEC CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In the second quarter of fiscal 2016, Symantec Corporation (“Symantec,” “our,” and “the Company” refer to Symantec Corporation and all of its subsidiaries) entered into a definitive agreement to sell the assets of our information management business (“Veritas”) to the Carlyle Group and certain co-investors (the “Buyer”). On January 29, 2016, the Company completed the sale of Veritas (the “Sale”) for net consideration of $6.6 billion in cash, 40 million B common shares of Veritas with an estimated fair value of $149 million and Veritas’ assumption of certain liabilities in connection with the acquisition.

The following unaudited Pro Forma Condensed Consolidated Balance Sheet, as of January 1, 2016, reflects Symantec’s financial position as if the Sale had occurred on that date. The following unaudited Pro Forma Condensed Consolidated Statements of Operations for the three fiscal years ended April 3, 2015, March 28, 2014, and March 29, 2013, reflect Symantec’s results of operations as if the Sale had occurred on March 31, 2012 and does not assume any interest income on cash proceeds. The Company has not presented the unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended January 1, 2016, as the results of operations of Veritas were reported as discontinued operations in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 1, 2016, filed with the Securities and Exchange Commission (the “SEC”) on February 4, 2016.

These unaudited Pro Forma Condensed Consolidated Financial Statements and the accompanying notes are based upon and should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the fiscal year ended April 3, 2015 and Quarterly Report on Form 10-Q for the three and nine months ended January 1, 2016. The accompanying unaudited Pro Forma Condensed Consolidated Statements of Operations have been prepared in accordance with the regulations of the SEC and should not be considered indicative of the financial position or results of operations that would have occurred if the Sale had been consummated on the dates indicated, nor are they indicative of the future financial position or results of operations of the Company.

In accordance with SEC regulations, the unaudited Pro Forma Condensed Consolidated Financial Statements reflect adjustments to the extent they are directly attributable to the Sale, factually supportable and, for statement of operations purposes, are expected to have a continuing impact on the Company’s result of operations.

The “Historical” column in the unaudited Pro Forma Condensed Consolidated Financial Statements reflects Symantec’s historical financial statements for the periods presented and does not reflect any adjustments related to the Sale and related events.

The “Information Management Business Disposal Group” column in the unaudited Pro Forma Condensed Consolidated Financial Statements is derived from the financial position and results of Veritas and other corporate charges that are directly attributable to Veritas. The “Other Pro Forma Adjustments” column in the unaudited Pro Forma Condensed Consolidated Balance Sheet reflects other effects of the Sale, including cash proceeds received at the close of the Sale, expected use of cash proceeds under our capital return programs, estimated after-tax gain on the Sale, and estimated tax payable related to the Sale.

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SYMANTEC CORPORATION

Pro Forma Condensed Consolidated Balance Sheet

As of January 1, 2016

(Dollars in millions, unaudited)

 

		Historical				Information Management Business Disposal Group				Other Pro Forma Adjustments				Pro Forma
ASSETS
Current assets:
Cash and cash equivalents		$	2,213			$	—			$	3,390	(1)		$	5,603
Short-term investments			56				—				—				56
Accounts receivable, net			490				—				—				490
Deferred income taxes			223				—				—				223
Deferred commissions			52				—				—				52
Other current assets			189				—				58	(2)			247
Current assets held for sale			3,950				(3,950	)			—				—
Total current assets			7,173				(3,950	)			3,448				6,671
Property and equipment, net			986				—				—				986
Intangible assets, net			464				—				—				464
Goodwill			3,146				—				—				3,146
Long-term deferred commissions			11				—				—				11
Other long-term assets			156				—				164	(3)			320
Total assets		$	11,936			$	(3,950	)		$	3,612			$	11,598
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	241			$	—			$	41	(4)		$	282
Accrued compensation and benefits			203				—				—				203
Deferred revenue			2,180				—				—				2,180
Other current liabilities			271				—				1,300	(5)			1,571
Current liabilities held for sale			932				(932	)			—				—
Total current liabilities			3,827				(932	)			1,341				4,236
Long-term debt			1,740				—				—				1,740
Long-term deferred revenue			366				—				—				366
Long-term deferred tax liabilities			399				—				—				399
Long-term income taxes payable			140				—				—				140
Other long-term obligations			70				—				—				70
Total liabilities			6,542				(932	)			1,341				6,951
Total stockholders’ equity			5,394				—				(747	)(6)			4,647
Total liabilities and stockholders’ equity		$	11,936			$	(932	)		$	594			$	11,598

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SYMANTEC CORPORATION

Pro Forma Condensed Consolidated Statements of Operation

Fiscal Year Ended April 3, 2015

(In millions, except per share data, unaudited)

 

		Historical				Information Management Business Disposal Group				Pro Forma
Net revenues		$	6,508			$	2,552			$	3,956
Cost of revenues			1,153				426				727
Gross profit			5,355				2,126				3,229
Operating expenses:
Sales and marketing			2,323				673				1,650
Research and development			1,144				332				812
General and administrative			379				17				362
Amortization of intangible assets			108				21				87
Restructuring, separation, and transition			252				88				164
Total operating expenses			4,206				1,131				3,075
Operating income			1,149				995				154
Interest income			12				1				11
Interest expense			(79	)			(1	)			(78	)
Other income (expense), net			11				(3	)			14
Income before income taxes			1,093				992				101
Income tax expense (benefit)			215				223				(8	)
Net income		$	878			$	769			$	109
Net income per share — basic		$	1.27							$	0.16
Net income per share — diluted		$	1.26							$	0.16
Weighted-average shares outstanding — basic			689								689
Weighted-average shares outstanding — diluted			696								696
Cash dividends declared per common share		$	0.60							$	0.60

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SYMANTEC CORPORATION

Pro Forma Condensed Consolidated Statements of Operation

Fiscal Year Ended March 28, 2014

(In millions, except per share data, unaudited)

 

		Historical				Information Management Business Disposal Group				Pro Forma
Net revenues		$	6,676			$	2,493			$	4,183
Cost of revenues			1,149				358				791
Gross profit			5,527				2,135				3,392
Operating expenses:
Sales and marketing			2,439				673				1,766
Research and development			1,039				317				722
General and administrative			446				26				420
Amortization of intangible assets			156				63				93
Restructuring, separation, and transition			264				17				247
Total operating expenses			4,344				1,096				3,248
Operating income			1,183				1,039				144
Interest income			12				1				11
Interest expense			(84	)			—				(84	)
Other income, net			45				9				36
Income before income taxes			1,156				1,049				107
Income tax expense			258				242				16
Net income		$	898			$	807			$	91
Net income per share — basic		$	1.29							$	0.13
Net income per share — diluted		$	1.28							$	0.13
Weighted-average shares outstanding — basic			696								696
Weighted-average shares outstanding — diluted			704								704
Cash dividends declared per common share		$	0.60							$	0.60

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SYMANTEC CORPORATION

Pro Forma Condensed Consolidated Statements of Operation

Fiscal Year Ended March 29, 2013

(In millions, except per share data, unaudited)

 

		Historical				Information Management Business Disposal Group				Pro Forma
Net revenues		$	6,906			$	2,638			$	4,268
Cost of revenues			1,175				309				866
Gross profit			5,731				2,329				3,402
Operating expenses:
Sales and marketing			2,789				657				2,132
Research and development			1,026				300				726
General and administrative			447				16				431
Amortization of intangible assets			286				190				96
Restructuring, separation, and transition			77				—				77
Total operating expenses			4,625				1,163				3,462
Operating income (loss)			1,106				1,166				(60	)
Interest income			12				1				11
Interest expense			(139	)			—				(139	)
Other income, net			27				1				26
Income (loss) before income taxes			1,006				1,168				(162	)
Income tax expense (benefit)			251				275				(24	)
Net income (loss)		$	755			$	893			$	(138	)
Net income (loss) per share — basic		$	1.08							$	(0.20	)
Net income (loss) per share — diluted		$	1.06							$	(0.20	)
Weighted-average shares outstanding — basic			701								701
Weighted-average shares outstanding — diluted			711								701

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

(1)	Reflects the cash proceeds of $7.0 billion received in connection with the Sale, of which approximately $100 million remained with Veritas, and $3.5 billion to be returned to shareholders in connection with the August 2015 repurchase program and the January 2016 capital return program.

(2)	Reflects a prepaid asset for future maintenance services that will be provided by Veritas to information management customers retained by Symantec.

(3)	Reflects 40 million B common shares of Veritas with an estimated fair value of $149 million and the long-term portion of the prepaid asset of $15 million.

(4)	Reflects estimated transaction costs incurred in connection with the Sale.

(5)	Reflects an estimated $1.3 billion payable for U.S. and foreign income taxes and indirect taxes resulting from the Sale.

(6)	Reflects the estimated after-tax gain of $2.8 billion related to the Sale and $3.5 billion capital return to shareholders.