SYMC Symantec Corporation

By Ezequiel Minaya 

Symantec Corp. said Thursday that private-equity firm Silver Lake would make a $500 million investment in the cybersecurity company and add one of its managing partners to Symantec's board.

Shares of Symantec jumped 8.6% to $20.83 in after-hours trading.

With the move, Symantec's board has agreed to boost the company's so-called capital-return program to $5.5 billion, returning all of the proceeds to shareholders from the recent sale of its Veritas data-storage and recovery business.

That will happen through a new $500 million accelerated stock-buyback program, a $4-a-share special dividend and $2.3 billion in additional stock buybacks. The program is slated to be completed March 2017. Symantec also unveiled that it aims to reach $400 million in cost savings by the end of fiscal 2018.

Silver Lake will make its investment by buying $500 million of notes due 2021 with an initial conversion price of $21 a share. Symantec sees that sale being completed in early March.

Ken Hao, managing partner of Silver Lake, will be named to Symantec's board, bringing the number of directors to 10.

Symantec in August agreed to sell its Veritas data-storage and recovery business to investors led by private-equity firm Carlyle Group LP for $8 billion. Last month, Carlyle Group, however, cut its offer to $7.4 billion citing unspecified and emerging "uncertainties."

The company on Thursday also released results for the third quarter of its 2016 fiscal year. Revenue and profit fell from the same period a year ago, though the results were within the company's guidance, with adjusted earnings even exceeding expectations by a penny.

For the quarter ended Jan. 1., Symantec earned $170 million, or 25 cents a share, down from $222 million, or 32 cents a share, a year earlier. Adjusted earnings excluding items were 26 cents a share, down from 33 cents.

Revenue fell 6% to $909 million, near the midpoint of its previously issued guidance.

The company had said it had expected revenue between $890 million and $920 million and earnings between 22 cents and 25 cents a share.

For the current quarter, the company expects revenue between $885 million and $915 million, with earnings between 15 cents and 18 cents and adjusted earnings between 24 cents and 27 cents.

Symantec helped pioneer the industry with its antivirus software during the 1980s and 1990s. But it has fallen behind as intruders have become more sophisticated. Its new rivals have included Cylance Inc., CrowdStrike Inc. and FireEye Inc.

The company has worked on new products to compete with these and other companies. Last year, it unveiled Symantec Advanced Threat Protection, which helps companies quickly deal with a variety of threats from a single console.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

February 04, 2016 17:21 ET (22:21 GMT)

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