Symantec to Sell Enterprise Security Assets to Broadcom

Software company Symantec (SYMC) said on Thursday that it has agreed to sell its Enterprise Security assets, which include the Symantec name, to Broadcom (AVGO) for $10.7 billion in cash as it seeks to advance its transformation strategy.

Symantec said the deal — which is expected to close before the end of the calendar year pending regulatory approvals — is expected to yield approximately $8.2 billion of after tax proceeds.

It said that it expects to return approximately 100% of the after-tax cash proceeds to shareholders in the form of a $12.00 per share special dividend in the fourth quarter of fiscal year 2020. In addition, Symantec said it expects to increase its regular dividend by 67% to $0.125 per share in the quarter following the close.

It added that the board of directors has approved an increase to its existing share repurchase authorization up to $1.6 billion. After the transition, it said that it believes that Norton LifeLock, its consumer cyber safety business, can generate $1.50 in annual adjusted earnings per share and achieve mid-single digit revenue growth year over year.

“This sale leaves behind underutilized assets that were not part of the transaction, including owned properties that will be monetized to cover a large portion of the estimated $1 billion cash cost to shed the estimated $1.5 billion in stranded costs,” Symantec’s statement added. “We would have been monetizing these assets as part of our overall strategy, but now we can do it while not subjecting our shareholders to the execution risk of such a major undertaking.”

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